SK Hynix Chasing Samsung Electronics... Enters 95,000 Won Range

Highest Price Since COVID-19... Expectations Rise for Stabilization in the 90,000 Won Range

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] As Samsung Electronics, the 'big brother' of the domestic stock market, shows an upward trend, a favorable wind is also blowing for SK Hynix, which ranks second in market capitalization. Attention is focused on whether it can stabilize in the 90,000 KRW range, given the recent surge in foreign investors' capital inflow.

According to the Korea Exchange on the 16th, as of 10:43 a.m., SK Hynix recorded 95,700 KRW, up 6.69% from the previous trading day. This is the highest price since February 26. After the 90,000 KRW level collapsed due to the economic slowdown caused by the COVID-19 pandemic in February, SK Hynix repeatedly failed to stabilize in the 90,000 KRW range. This time, with solid performance and growing popularity of the semiconductor sector, attention is focused on whether it can maintain the 90,000 KRW level.

The recently surged foreign buying is also considered a positive factor. Foreign investors have purchased SK Hynix shares worth 421.2 billion KRW from the beginning of this month until the 13th. This is the second-largest amount among sectors with net foreign buying this month. It is also the second-highest monthly net foreign purchase this year. Foreign investors, who had been selling SK Hynix shares every month this year, have turned to active buying since September. After purchasing 934.1 billion KRW in September, they have maintained steady buying with 24.2 billion KRW in October. As foreign investors' supply and demand are leading the stock market amid the resurgence of COVID-19, there is an analysis that additional upward potential remains.

Strong performance is expected to continue next year as well. From the end of the fourth quarter this year, inventories of semiconductor manufacturers and customers are entering normal levels, and from the first quarter of next year, a slowdown in the decline of memory average selling prices (ASP) is expected. Additionally, due to supply-demand stabilization, ASP increases for DRAM and NAND flash are anticipated. Furthermore, with server replacement demand arriving for the first time in three years, demand for DRAM and solid-state drives (SSD) is also increasing, leading to an expected DRAM supply shortage in the second half of next year. KB Securities forecasts SK Hynix's operating profit next year to reach about 8.5 trillion KRW, a 76% increase from this year's estimate. This is expected to be the largest performance in three years since 2018.

The acquisition of Intel's NAND business is also expected to have a clear effect on market share expansion and profitability improvement, regardless of the controversy over the acquisition price (around 10.3 trillion KRW). It is possible to diversify the NAND portfolio by moving away from NAND flash single-product sales to storage optimization technology using Intel's software (SW) and controllers. Dongwon Kim, a researcher at KB Securities, said, "Especially as the center of NAND demand shifts from mobile to server SSDs, the global market share of high-profit enterprise SSDs (eSSD) can leap from 5th place (7%) to 1st place (37%, Samsung Electronics is 34%). Intel's floating gate technology, a Chinese production line, secures cost competitiveness in producing large-capacity QLC. SK Hynix's stock price recorded the only negative (-14.0%) among the top 10 KOSPI market capitalization companies compared to the beginning of the year, so considering next year's performance improvement, its investment attractiveness will increase significantly."

This content was produced with the assistance of AI translation services.