SK Hynix Bets $38 Billion on AI Memory Boom While Its Stock Tells a Different Story
Published on 08/07/2026 at 12:42 | Redaktion boerse-global.de
The disconnect between SK Hynix's boardroom and its trading floor has rarely been starker. On the same day the memory-chip maker's shares extended a brutal slide that has now erased more than half the stock's value from its June peak, the company's directors signed off on one of the largest capital commitments in its corporate history.
The approval covers 54.3 trillion won — roughly $38 billion — for two new fabrication plants in Yongin and Cheongju. The bigger slice, 35.2 trillion won, is earmarked for the Y2 fab in the Yongin cluster, a 1.13-million-square-meter facility designed to produce DRAM and HBM chips for the AI market. Construction there begins in July 2027, with the first cleanroom scheduled for June 2029. The NAND-focused M17 plant in Cheongju carries a 19.1 trillion won price tag, with groundbreaking set for February 2027 and cleanroom completion expected in December 2028. Including equipment costs, the total program reportedly exceeds 150 trillion won — roughly 45 percent of SK Hynix's 120.7 trillion won in book equity.
That is an extraordinary level of conviction in the durability of the AI memory cycle, particularly at a moment when the market is signaling the opposite. The stock changed hands at 1,422,000 won on Friday, down 4.88 percent on the day and 52.39 percent below the record high struck on June 25. Thursday's session was even uglier, with the shares collapsing more than 10 percent as the Kospi tumbled 4.58 percent to 6,296.38 points amid a US-led technology selloff. Samsung Electronics, the sector's other heavyweight, lost roughly 6.3 percent that day but found buyers on Friday as investors rotated toward its more diversified business mix over SK Hynix's purer HBM exposure.
A Record Quarter That Missed the Mark
The recent turbulence is not a single event but the second sharp reversal within days. When SK Hynix reported second-quarter results on July 29, the numbers looked spectacular in isolation: revenue of 79.3187 trillion won, operating profit of 60.5426 trillion won — a 557 percent surge year over year — and net income of 93.9226 trillion won. The operating margin clocked in at a staggering 76 percent.
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But the market had expected more. LSEG SmartEstimates showed analysts had penciled in roughly 64 trillion won in operating profit and 84 trillion won in revenue. The gap to consensus triggered a 9.6 percent drop on the day, and the shares have struggled to find their footing since. The stock now trades about 30.14 percent below its 50-day moving average of 2,140,092.50 won, a technical signal that the selling pressure has yet to abate.
Retail investors in Korea, however, remain undeterred. In the week through Friday, domestic individuals bought a net 4.44 trillion won worth of SK Hynix shares, even as foreign investors rotated toward defensive and biotech names like Hanwha Aerospace and Celltrion.
The $263 Billion Question
The central debate among shareholders is no longer about earnings power — that is proven — but about what management will do with the cash. SK Hynix announced a quarterly dividend of 375 won per share with a late-August record date, and signaled that additional shareholder returns, potentially including buybacks, could be unveiled in the third quarter.
Investor patience has been tested by regulatory mechanics. The company completed an ADR placement that triggered a 25-day quiet period under US securities law, which expired on August 4. Management said on July 29 that it could not provide details on distribution plans until that process concluded. The anticipation alone drove the stock higher midweek before Thursday's rout.
The stakes are considerable. Reuters reported Thursday that SK Hynix and Samsung Electronics could together command net liquidity of $263 billion by year-end — more than double Nvidia's net cash position. With the AI boom fueling record profits, investors are pressing both companies to return a larger share of that hoard. The tension is real: management must balance payouts against the enormous capital demands of the fab expansion, a challenge Samsung and Micron are also wrestling with.
Wall Street's Vote of Confidence
The post-quiet-period coverage initiation was notably bullish. On August 4, Cantor Fitzgerald launched coverage with an Overweight rating and a $300 per-ADR price target, implying roughly 100 percent upside. Rosenblatt, Bank of America, UBS, Needham, Stifel, Wolfe Research, and RBC Capital Markets also initiated with buy-equivalent ratings, with targets ranging from $200 to $320 per ADR. Barclays' Simon Coles trimmed his target from $330 to $300 on July 29 — citing lower expected average selling prices in the second quarter — but maintained an Overweight stance.
Insiders appear to share that conviction. SK Group Chairman Chey Tae-won purchased 4.8 billion won worth of shares on July 31.
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The China Factor and a Structural Shift
The investment offensive also responds to intensifying competition from Beijing. CXMT, the Chinese memory maker, expanded its global DRAM share to 7 percent in the second quarter, while SK Hynix's slipped to 26 percent. CXMT is preparing a Shanghai IPO to fund its own HBM development, and South Korea's Industry Minister Kim Jung-kwan has warned that overly generous profit distribution at domestic chip giants could undermine the country's competitive position — explicitly citing CXMT's investment momentum.
Goldman Sachs, by contrast, argues the memory cycle is structurally stronger and longer than previous booms, a view underpinning its 12-month Kospi target of 12,000 points. Omdia projects 19 percent annual growth in the DRAM and NAND markets through 2030.
What's Next
For the third quarter, SK Hynix guided to DRAM shipments rising roughly 10 percent quarter over quarter, with NAND bit growth in the low single digits. Capital expenditures for the year should reach the high-40-trillion-won range. HBM4 mass production began in the second quarter, with the full ramp slated for the second half of this year; samples of the follow-on HBM4E have shipped, with series production targeted for 2027. At the Flash Memory Summit in Santa Clara, the company and SanDisk unveiled initial standards specifications for High Bandwidth Flash and showed off a tenth-generation 4D NAND wafer with 375 layers, promising a 2.5-fold improvement in performance per watt over the prior generation.
The bet embedded in Friday's board decision is straightforward: that the AI memory demand cycle will outlast the current market selloff. Whether the stock's slide is a correction or a repricing, SK Hynix's management has made its answer clear — they are all in.
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