DS Investment & Securities said on the 17th that while SK hynix needs to secure additional growth engines, the likelihood of overseas front-end process investment is increasing in the mid to long term. It maintained its investment opinion at buy (BUY) and raised the target price to 3.1 million won from 1.6 million won. The previous session's closing price was 2.288 million won.
DS Investment & Securities forecast that in the second quarter of this year SK hynix will post revenue of 82 trillion won and operating profit of 61 trillion won. It said revenue will increase 57% and operating profit 63% compared with the first quarter of this year.
Lee Su-rim, an analyst at DS Investment & Securities, analyzed that SK hynix is at a point where it needs to secure additional growth engines after the Yongin project. In this context, the analyst explained that the likelihood of SK hynix making overseas front-end process investments is growing in the mid to long term.
The analyst said, "Recent reports said big tech customers proposed supporting new production line investments and sharing equipment purchase expenses to secure HBM volumes," adding, "At Computex, Chairman Chey Tae-won publicly mentioned for the first time the possibility of an overseas memory production base."
The analyst added, "Considering the establishment of an artificial intelligence (AI) company and the 14 trillion won rights offering, there is a possibility of investing in a front-end fab in the United States—where major big tech customers are concentrated—targeting post-HBM5," and forecast, "If SK hynix secures a U.S. production base through a joint venture (JV) with big tech customers or a long-term agreement (LTA), it can ease the burden of large-scale investment and also secure mid- to long-term visibility into HBM demand."