KB Securities said on the 31st that despite heightened geopolitical risks from rising tensions in the Middle East, SK hynix is continuing its earnings uptrend on the back of demand for artificial intelligence (AI) memory. It maintained a "Buy" rating and a target price of 1.7 million won. The previous trading day's closing price for SK hynix was 875,000 won.
Kim Dong-Won, an analyst at KB Securities, said, "AI memory demand is showing an unwavering structural uptrend despite external variables such as the war in the Middle East," adding, "In 2026, U.S. big tech companies' AI capital expenditures are expected to reach 1,100 trillion won, up 84% from the previous year, making a prolonged supply bottleneck in memory semiconductors inevitable."
It also assessed that the supplier-advantaged environment is still continuing. Kim said, "In recent months, major big tech companies have been actively seeking to sign long-term supply agreements (LTA) of three to five years along with large prepayments to secure stable memory supply, but given limited wafer production capacity, the LTA share will likely remain under 20% of total memory capacity (CAPA)."
He added, "The fulfillment rate of key customers' memory demand is only around 60%, so strategies prioritizing securing volume over price are continuing." He also said, "The tight memory supply-demand environment is likely to persist for at least three years."
Google's newly unveiled technology "TurboQuant" was cited as a factor that could further expand memory demand. Kim said, "AI efficiency technologies such as Google's TurboQuant will lower barriers to entry in the AI inference market while driving increases in computation and memory loadings, accelerating overall AI demand growth," adding, "A short-term share-price correction could be a meaningful buying opportunity."
KB Securities projected SK hynix's operating profit this year at 177 trillion won, up 275% from the previous year. By segment, it estimated DRAM at 148 trillion won, about triple year over year, and NAND at 29 trillion won, 14 times the previous year.