Summary

  • DS Investment & Securities said it maintained a buy rating on SK Hynix and kept its target price at 2.64 million won ($1,910).
  • It said the company would maintain strong profitability and operating profit through 2029, backed by demand for HBM, server DRAM, and AI server semiconductors.
  • It said DRAM average selling prices (ASP), expanding HBM4 sales, and growth in the AI server market would sustain growth in DRAM shipments through 2029.

Forecast Trend Report by Period

DS Investment & Securities said SK Hynix is set to maintain high profitability through 2029 despite falling memory-chip prices, supported by demand for semiconductors used in artificial intelligence servers.

On November 10, DS Investment & Securities maintained its buy rating on SK Hynix and kept its target price at 2.64 million won ($1,910). Lee Su-rim, an analyst at the brokerage, wrote that even if memory prices decline from 2028, operating profit in 2029 would reach 290.3 trillion won ($210.4 billion), or about 65% of the 2027 level.

The brokerage cited demand for server DRAM and high-bandwidth memory, or HBM, as the main earnings drivers. It said AI infrastructure expansion is increasing memory content per server, while new HBM product launches and a lag in the reflection of supply-contract pricing should soften the impact of falling conventional DRAM prices.

The near-term earnings outlook is also positive. DS Investment & Securities forecast fourth-quarter revenue of 128.3 trillion won ($93.0 billion) and operating profit of 102.1 trillion won ($74.0 billion) for SK Hynix this year. Both figures would be up 23% from the previous quarter. The firm said server-memory supply should increase as production ramps up at the Cheongju M15X plant and yields improve for 1c DRAM.

It also forecast a recovery in shipments from the fourth quarter after a temporary decline in the third quarter during the HBM generational transition. Full-scale sales of next-generation HBM4 should drive earnings improvement, and new supply-contract pricing reflected early next year is expected to lift DRAM average selling prices.

DS Investment & Securities projected SK Hynix's operating profit at 443.8 trillion won ($321.6 billion) in 2027. That would mark a 56% increase from a year earlier, with the operating margin estimated at 79%. Even if conventional DRAM prices weaken in the second half of next year, a higher share of high-value HBM sales should support overall average selling prices across the product lineup.

Over the medium to long term, the brokerage said growth in the AI server market should drive memory demand. Even if capital-expenditure growth at four major U.S. cloud companies slows to 14% in 2028 from 53% in 2027, global AI server shipments are projected to rise 30% in 2028. Factoring in higher memory capacity per server, SK Hynix's DRAM shipments are forecast to increase 23% over the two years through 2029.

Lee said operating profit should reach 330.7 trillion won ($239.6 billion) in 2028 and 290.3 trillion won ($210.4 billion) in 2029 even after reflecting depreciation tied to new production facilities and the burden of initial yields. He added that investors should focus more on the structural increase in AI server semiconductor demand than on the possibility of falling memory prices.

Suehyeon Lee