SK Hynix Cracks $1 Trillion Market Cap, Joining Samsung and Micron in AI-Fueled Rally
By Jihoon Lee, Yena Park and Heekyong Yang
SEOUL, May 27 (Reuters) – SK Hynix surged past $1 trillion in market capitalization on Wednesday, becoming the third memory chip giant to achieve the feat in as many weeks, as the global artificial intelligence boom drives an unprecedented rally in semiconductor stocks.
The South Korean company’s shares closed up 9.3%, after hitting an intraday gain of 14.9%, lifting its market value to a record of about 1,680 trillion won ($1.12 trillion). The rally also pushed the benchmark KOSPI index to an all-time high.
Domestic rival Samsung Electronics first broke the $1 trillion barrier on May 6, and U.S.-based Micron Technology followed on Tuesday. The trio now form an elite club of trillion-dollar chipmakers riding a wave of AI-driven demand for high-bandwidth memory (HBM) and other advanced chips used in data centers.
“The structural shift toward AI is reshaping the entire memory landscape,” said Kim Young-gun, an analyst at Mirae Asset Securities in Seoul. He raised target prices for SK Hynix and Samsung by 18.8% and 14.6%, respectively, citing expectations that memory chip supply will remain tight through 2028.
Prices for memory chips, particularly DRAM and NAND flash, have more than doubled in the first quarter from the previous period and are forecast to jump up to 63% in the current quarter. The shortage stems from AI data centers gobbling up supply that once fed smartphones, laptops and automobiles, helping top manufacturers post record profits.
South Korea now stands as the only country outside the United States with two companies in the trillion-dollar club. Along with Taiwan’s TSMC, Asia now counts three firms at that valuation.
Shares of Samsung also rose as much as 8% before closing 2.7% higher at a record 307,000 won, as unionized workers voted to approve a tentative wage deal, averting a strike that could have disrupted global chip supplies.
UBS on Tuesday more than tripled its target price for Micron, citing “the structural changes AI has driven to the entire memory complex.”
ETF Frenzy Fuels Rally
Retail interest in South Korea’s chipmakers has been turbocharged by the launch of the country’s first single-stock leveraged exchange-traded funds (ETFs) tied to Samsung and SK Hynix. On their market debut Wednesday, the ETFs posted double-digit gains, amplifying the rally in underlying shares.
“Leveraged ETF buying drives futures purchases, which lift futures prices and widen the gap with spot, pulling in more spot buying,” said Kang Jin-hyuk, an analyst at Shinhan Securities in Seoul. He noted that the KOSPI pared gains near the close as the ETF effect faded.
Financial investment firms were net buyers of KOSPI shares worth 1.3 trillion won on Wednesday, while retail investors bought 403 billion won. Foreign investors, however, were net sellers.
So far this year, Samsung shares have gained 149%, SK Hynix has surged 215%, and Micron has climbed 245%.
($1 = 1,507.8300 won)
(Reporting by Jihoon Lee, Yena Park and Heekyong Yang; Editing by Ed Davies, Jamie Freed and Kate Mayberry)