SK Hynix Leads Rally in South Korean Chip Stocks on AI Demand
By Kwanwoo Jun
SK Hynix led a broad rally in South Korean chip stocks, tracking gains by U.S. peers overnight and buoyed by the artificial-intelligence boom fueling demand for its high bandwidth memory products.
Shares of the global HBM market leader rose as much as 4.4% to 180,800 won ($133.38) early Tuesday, outperforming the benchmark Kospi's 1.9% increase.
Fellow memory-chip maker Samsung Electronics was 3.6% higher. Among other Asian chip stocks, Japan's Tokyo Electron climbed 3.7% and Taiwan's TSMC added 1.4%.
The gains reflected the rosy market outlook for HBM products that run AI and other advanced computing systems.
The global HBM market could grow 200% this year and accelerate further in 2025, according to Avril Wu, a senior research vice president of Taiwan-based TrendForce. She expects HBM products to account for 5% of the total DRAM output capacity this year and more than 10% by 2025, up from 2% in 2023.
With HBM chips several times more expensive than conventional ones, the AI-chip products could account for 21% of the total DRAM market revenue this year and more than 30% in 2025, up from 8% in 2023, Wu said in a research note Monday.
SK Hynix said last week that its HBM products were sold out for 2024 and almost fully booked for 2025.
The company plans to mass produce its most advanced HBM product, the 12-stack HBM3E chip, in the third quarter of 2024 to meet brisk demand, with samples of these chips to be available to its clients in May.
SK Hynix swung to a net profit in the first quarter of 2024 after five straight quarters of losses. It expects the overall memory market to recover this year and is ramping up global production capacity to meet growing demand for advanced AI chips.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
May 07, 2024 01:02 ET (05:02 GMT)
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