Key Takeaways
Shares of South Korean chipmaker SK Hynix Inc. surged as much as 15 percent on Wednesday after competitor Samsung Electronics Co. flagged its most profitable quarter on record, signaling an industry-wide boom from demand for artificial intelligence chips.
“As customers anticipated further increases, actual contract prices came in higher, leading to the beat,” Kim Sunwoo, a senior analyst at Meritz Securities, said in a recent note explaining the dynamic.
Samsung, the world’s largest memory chipmaker, said in preliminary guidance that it expects its first-quarter operating profit to climb more than eightfold to 57.2 trillion won ($37.8 billion) from 6.69 trillion won a year earlier. The result would nearly triple its previous record of 20.07 trillion won set in the fourth quarter of 2025. Revenue was projected to rise 68 percent to 133 trillion won.
The blowout forecast confirms that soaring demand for high-bandwidth memory (HBM) used in AI accelerators is translating into significant pricing power and profits for top-tier suppliers. The positive results from Samsung, a bellwether for the global technology industry, suggest that competitors like SK Hynix are poised to benefit from the same market tailwinds.
The rally in both companies’ shares underscores the explosive growth in the memory market over the past year. Demand for HBM chips has created shortages across the sector, allowing memory makers to raise prices significantly. According to research firm TrendForce, contract prices for DRAM chips are expected to increase by more than 50 percent in the current quarter alone.
The results also reflect a shifting competitive landscape. While SK Hynix had an early lead in the HBM market, Samsung has been closing the gap with its latest HBM4 chips, according to a Reuters report. The intense demand for AI-related components is proving large enough to lift all major producers, including U.S.-based Micron Technology, which also recently forecast revenue above Wall Street expectations.
Still, some analysts point to potential headwinds. The conflict in the Middle East has raised concerns about rising energy and material costs, which could pressure margins later in the year. “There are growing concerns about a peak-out in memory price increases,” NH Investment & Securities senior analyst Ryu Young-ho said. “It does appear that we are now past the initial upcycle phase and into a later stage.”
This article is for informational purposes only and does not constitute investment advice.
