SK Hynix joins $1 trillion AI chip club
SK Hynix crossed US$1 trillion in market value for the first time on Wednesday, joining Samsung Electronics and Micron Technology as the third memory chipmaker to hit that milestone during the artificial intelligence-driven boom.
Shares of the South Korean chipmaker jumped as much as 14.9 percent, pushing its market capitalization to a record 1,680 trillion won (about S$1.43 trillion). The rally also helped lift the country’s benchmark Kospi index to an all-time high.
Samsung surpassed US$1 trillion on May 6. US-listed Micron did so a day before SK Hynix, on Tuesday.
AI demand tightens memory chip supply
Strong demand for high-end memory chips used in AI systems — particularly those designed by Nvidia — has tightened supply and driven up prices. That’s benefited the world’s biggest memory makers.
Memory chip prices doubled in the first quarter alone from the previous period. Analysts expect them to climb as much as 63 percent in the current quarter, constrained by AI data center demand that has squeezed supplies for smartphones, laptops and automobiles.
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The result has been record profits for top memory chipmakers.
Only three Asian companies have ever joined the US$1 trillion club: TSMC, Samsung, and now SK Hynix. South Korea becomes the first country outside the United States to have more than one company reach that valuation.
Kospi hits record on chipmaker strength
Led by the two chip giants, South Korea’s Kospi index rose as much as 5.1 percent to 8,457.09 — its highest ever. The sharp gains triggered a “sidecar” curb that temporarily halted algorithmic trading.
With Wednesday’s rally, Samsung and SK Hynix now account for half of the index by market capitalization.
The Kospi has risen 91 percent so far this year, after climbing 76 percent last year. It has emerged as one of the world’s best-performing benchmarks during the AI boom.
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“We expect memory chip demand to continue exceeding supply by 2028 to keep price levels high,” Kim Young-gun, an analyst at Mirae Asset Securities in Seoul, said in a report. He raised target prices for SK Hynix and Samsung by 18.8 percent and 14.6 percent, respectively, to 3.8 million won per share and 550,000 won.
SK Hynix shares traded around 2.3 million won on Wednesday.
Samsung avoids strike, shares also hit record
Samsung shares rose as much as 8 percent to 323,000 won on Wednesday, also a fresh record. Unionized workers in South Korea voted to approve a tentative wage deal, averting a strike that could have disrupted global chip supplies.
UBS said in a report on Tuesday that it had more than tripled its target price for Micron, citing “the structural changes AI has driven to the entire memory complex.”
Samsung shares have risen 149 percent so far this year. SK Hynix shares are up 215 percent. Micron shares are up 245 percent.
Retail investors pile into chip ETFs
In recent weeks, US retail investors have poured billions of dollars into a new exchange-traded fund that gives them exposure to Samsung and SK Hynix.
The first South Korean single-stock leveraged ETFs linked to those two companies surged on their market debut Wednesday, posting double-digit gains as semiconductor shares rallied.
The Korea Financial Investment Association’s website, which provides online courses required for retail investors to invest in leveraged ETFs, briefly went offline Wednesday as users rushed to access the courses, local media reported.
What started as a supply crunch for memory chips has turned into a sustained rally that shows no signs of cooling. The three biggest makers are now all worth more than US$1 trillion, and analysts expect prices to stay elevated for years.
