South Korean memory giant SK hynix (SKHYV) recently listed its American Depository Receipts (ADRs), raising $26.50 billion with the share sale. The company is benefiting from demand for AI infrastructure and has impressed “Mad Money” host Jim Cramer. He believes that while the company’s memory chips trade at a premium, the stock trades at a discount. While he is concerned about the cyclical nature of the memory business, he thinks investors willing to deal with a bit of volatility could put a small position and leave room to capitalize on momentary weakness.
What Does SK Hynix Do?
SK Hynix, based in Icheon-Si, South Korea, is the world’s second-largest maker of memory chips. The company makes dynamic random access memory (DRAM) chips, flash memory chips (NAND), and CMOS image sensors (CIS), which are used in various applications. While SK Hynix makes a varied sort of memory chips, it has grabbed the spotlight for its HBM chips, with a solid presence in the memory solutions market.
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On July 10, the company listed its ADRs on Nasdaq, closing the July 10 trading session at $168.01, gaining 13% intraday, as U.S. investors jumped on the chance to invest in South Korea’s second-most valuable company. The shares started trading with the symbol “SKHYV” and will switch to “SKHY” on July 14. As memory demand continues to increase with the growth of AI infrastructure, the company’s rapid rise has been well documented. In fact, over the past year, SK Hynix’s valuation rose more than sevenfold.
However, its shares listed in Seoul dropped 15.4% on July 13, registering their worst day after the company’s stellar Nasdaq debut. The reason appears to be profit-taking and investors’ worries about the value of U.S.-listed shares compared with shares listed in South Korea. Daniel Yoo, global strategist at Yuanta Securities, said that the decline reflects the mechanics of the offering. Yoo called it “additional share issuance,” which the domestic market is taking as a corrective period.
SK Hynix’s Financials Have Skyrocketed
Based on the AI boom. SK Hynix’s financials are surging robustly. The company’s revenue grew 198.1% year-over-year (YOY) to KRW 52.58 trillion ($35.05 billion) in the first quarter of 2026. Its gross profit also increased 312.6% from the prior-year period to KRW 41.68 trillion ($27.78 billion).
SK Hynix’s net profit climbed 397.6% YOY to KRW 40.35 trillion ($26.89 billion). The company ended Q1 2026 with a cash balance of KRW 54.33 trillion ($36.22 billion), a significant increase from the prior-year period ending cash balance of KRW 14.31 trillion ($9.54 billion).
SK Hynix Facing A High Memory Chip Demand
The memory crunch has taken the semiconductor market by storm, creating huge windfalls for memory giants like SK Hynix, Micron Technology (MU), and Samsung Electronics Co. Ltd. These are used in everyday consumer electronics, but now they have found a new buyer in data centers. The AI infrastructure buildout has led hyperscalers like Alphabet’s (GOOG) (GOOGL) Google, Meta Platforms (META), and Amazon.com (AMZN) to vie for these semiconductors, pitting them against consumer electronics giants like Apple (AAPL) and Microsoft’s (MSFT) Xbox.
Memory suppliers now have to choose which type of chips their manufacturing lines will churn out, and AI-powering hyperscalers are seemingly winning this race because of their deep pockets. CEOs and analysts continue to expect further pricing pressures in 2027 as a result of this.
In fact, high-bandwidth memory (HBM) semiconductors are in such high demand that their prices are on track to more than double by 2027. According to some industry sources (as reported by DigiTimes), next-generation HBM4 prices could rise to $4 to $5 per gigabit or higher, up from approximately $2 per gigabit in the second half of 2026.
Amid this, big memory suppliers like SK Hynix are locking down three- to five-year long-term agreements with tier-one AI clients. SK Hynix has a multi-year partnership with Nvidia Corporation (NVDA) to supply advanced memory and also advance next-generation memory for Nvidia’s AI infrastructure roadmap.
However, the memory market tends to be cyclical, implying that after this massive boom, there is likely to be a lull. On the other hand, SK Hynix Chairman Chey Tae-won doesn’t see signs of demand decreasing. He believes that with AI, the previous boom-bust cycles will not culminate. Some of the HBM manufactured by SK Hynix to address this demand is expected to be produced in the United States at a $4 billion plant in Indiana, while the majority of the expansion will come from South Korea, including a cluster of chip fabrication plants in Yongin valued at $390 billion.
On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
