[Click eStock] "SK Hynix, Demand Increases on Price Bottom Recognition"

Daishin Securities maintained its investment opinion of 'Buy' on SK Hynix on the 26th and raised the target price by 25% from the previous 120,000 KRW to 150,000 KRW.

Daishin Securities forecasted that SK Hynix's bit growth (bit shipment growth rate) for both DRAM and NAND in the second quarter of this year will exceed previous estimates and consensus. This is due not only to increased demand for premium products for artificial intelligence (AI) computing but also to additional demand driven by recognition of price bottoms. It appears that orders from module houses and mobile and PC companies in the Greater China region are increasing.

The estimated bit growth for DRAM was revised upward from 21% to 38%, and NAND was also revised upward from 17% to 30%. Although B2C customers still maintain high inventory levels, they are showing signs of restocking inventory due to the perception of price bottoms.

Prices are also expected to decline less than previously forecast due to mix improvement driven by an increased proportion of premium products, with the second-quarter price decline expected to be only -5% for DRAM and -6% for NAND.

The unit price per capacity of High Bandwidth Memory (HBM) products is estimated to be about 5 to 6 times higher than the average of Double Data Rate (DDR4/DDR5), suggesting a relatively high contribution to profitability.

Researcher Wi Min-bok of Daishin Securities analyzed, "With the increase in the proportion of high value-added products such as HBM and DDR5, a DRAM supply shortage is expected from the second half of 2024."

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