SK Hynix Positioned to Benefit From Extended AI Memory Boom
Strong demand from artificial intelligence and ongoing supply constraints could keep the memory chip industry in an upcycle through 2027 and possibly beyond.
That is the view of analysts at Stifel, Wolfe Research and RBC Capital Markets, which recently began coverage of SK Hynix with bullish ratings.
The firms highlighted the company’s leadership in high-bandwidth memory, or HBM, as well as its relatively attractive valuation following its U.S. listing.
AI Demand Reshapes the Memory Chip Market
Rapid investment in AI infrastructure has changed the outlook for the global memory industry.
Demand for DRAM and NAND memory is growing faster than available supply as cloud companies expand the computing capacity needed for AI training and inference.
At the same time, manufacturers face several limits on production growth. These include restricted cleanroom space, equipment shortages and the greater complexity involved in producing advanced memory chips.
As a result, analysts expect supply to remain tight and memory prices to stay elevated for longer than in previous industry cycles.
SK Hynix Maintains Strong HBM Market Share
SK Hynix is one of the world’s largest memory chip manufacturers and a major supplier of HBM products used in AI accelerators.
Stifel estimates that the company controlled more than 60% of the HBM market in 2025. RBC places its current market share at approximately 55% to 56%.
This leading position gives SK Hynix a major advantage as demand for AI chips continues to increase.
The three investment firms assigned price targets ranging from $200 to $240 per American depositary receipt.
AI Servers Drive DRAM Demand Higher
Analysts expect demand for AI-related memory to remain strong as major cloud providers invest heavily in new infrastructure.
The growth of agentic AI applications may also increase the amount of memory required in each server.
According to the forecasts, annual DRAM bit demand could rise by more than 20%. However, industry supply may struggle to keep pace because of physical production constraints.
This imbalance could support stronger pricing and higher profit margins across the memory sector.
HBM4 Pricing Could Become a Major Catalyst
One of the main catalysts identified by analysts is the expected repricing of HBM contracts in 2027.
RBC believes HBM prices could increase by more than 50% as customers move toward the next-generation HBM4 standard.
Wolfe Research also sees significant upside from improving HBM profit margins. In addition, long-term supply agreements could give SK Hynix better visibility over future pricing and revenue.
These contracts may help reduce some of the volatility traditionally associated with the memory chip industry.
Analysts See SK Hynix as Undervalued
Although SK Hynix shares have rallied sharply over the past year, analysts believe its newly listed ADR remains undervalued compared with U.S. competitors.
Stifel noted that SK Hynix has historically traded at a discount to Micron, despite its stronger position in advanced memory technology.
RBC estimates that the stock trades at a discount of around 20% to 25% compared with U.S. memory chip peers.
Meanwhile, Wolfe Research said the ADR trades at roughly four times projected 2028 earnings. The firm also expects SK Hynix to generate substantial free cash flow over the next several years.
Longer and More Profitable Memory Cycle Expected
Analysts believe several factors could support SK Hynix over the coming years.
These include sustained AI demand, limited supply growth, long-term customer agreements and the company’s leadership in high-bandwidth memory.
Together, these trends could produce a memory industry upcycle that lasts longer and generates stronger profits than previous recoveries.
