The stock price of SK hynix, which rose to 300,000 won for the first time in history, is plummeting during the trading session. This comes as forecasts arise that competition in the high bandwidth memory (HBM) market, which has played a significant role in the stock price rebound, will intensify. The securities industry believes that the possibility of further adjustment is high.
As of 1:47 p.m. on the 17th, SK hynix is trading at 269,500 won, down 26,000 won (8.78%) from the previous trading day. After finishing trading at 300,000 won on the 14th, recording its highest stock price in 12 years based on closing price since its inclusion in SK Group, the stock has suddenly shown a downward trend. The last time SK hynix exhibited greater volatility was on April 10, when it surged 11.03%.
Analysts believe that the drop in stock prices on this day is due to reports from the securities industry. Goldman Sachs downgraded its investment opinion on SK hynix from 'buy' to 'neutral' on this day, citing increased competition in the HBM market expected from next year, which will lead to a decrease in product prices.
Hanwha Investment & Securities explained in its semiconductor industry analysis report that "the possibility of a shift in the HBM market structure next year is acting as a factor for the stock price decline," adding, "Today's sharp drop has reduced the valuation level to a P/B of 1.8X."
Kim Kwang-jin, a researcher at Hanwha Investment & Securities, also left open the possibility of further adjustments for SK hynix. He noted, "While we maintain a positive view on the semiconductor sector in light of a continuing upcycle in artificial intelligence (AI) related fields until next year, the possibility of additional adjustment is high, considering the potential changes in the HBM market structure and the increase in conventional DRAM supply leading to price declines."
He further remarked, "We believe the situation is similar to the stock price decline period of the semiconductor sector from July to September last year, and it may be necessary to consider the possibility that SK hynix's stock price could adjust to a P/B of 1.5X based on this year's performance or even down to last September's low valuation." As of September 19 last year, SK hynix's stock price was 152,800 won.
Hanwha Investment & Securities forecasted that the major change in the HBM market next year will be intensified competition. While SK hynix is likely to maintain its top position in the HBM market, changes in market share are anticipated. Next year, SK hynix's HBM shipment estimate is about 16 billion Gb, which is a slowdown compared to this year's growth.
Kim added, "The slowdown in the HBM generation transition speed and the narrowing technology gap of latecomers are direct causes. Unlike the situation where SK hynix effectively maintained a monopoly, HBM4, which is expected to emerge next year, may not have a monopolistic structure. This will likely impact SK hynix's selling price and profit margins."