1

Will SK Hynix be able to maintain its dominance in the high-value HBM (High Bandwidth Memory) market, which it has preoccupied, into the next generation? Furthermore, reflecting the astronomical profits and vision it generates based on this, will it be able to have its corporate value fully evaluated in the global market?

SK Hynix's biggest battlegrounds this year to achieve this are the development of competitive HBM4E and its listing on the US American Depositary Receipt (ADR). Amid a fierce technology speed race with Samsung Electronics, a successful ADR listing on the US stock market can be seen as interlocking gears. The US ADR listing is expected to serve as an opportunity to re-evaluate the company's value in the United States, the largest AI market, and play a major role in raising funds for research and development and facility investment. Conversely, the vision for dominance in next-generation HBM4E is the momentum that will drive the success of the US ADR.

On the 18th, SK Hynix announced that it has supplied 12-layer samples of HBM4E, its next-generation ultra-high-performance DRAM for AI, to major customers. HBM4E is the generation immediately following HBM4, and Samsung Electronics shipped samples for the first time in the world late last month. With SK Hynix releasing its samples less than a month later, the two companies are continuing a fierce speed race in the next-generation HBM sector.

SK Hynix introduced HBM4E as achieving a maximum data processing speed of 16 Gbps per pin and improving energy efficiency by more than 20%, thereby significantly boosting data processing performance essential for AI training and inference.

Ahn Hyun, Head of Development at SK Hynix, said, "By continuing the industry’s best technological competitiveness and mass-production capabilities accumulated so far into the HBM4E product, we have laid the foundation to continuously lead AI innovation," adding, "Based on cooperation with partners, we will preemptively realize the value demanded by the market to solidify our technological leadership as a full-stack AI memory creator."

Having wrapped up the first half of the year with the battle for HBM4E dominance against Samsung Electronics, SK Hynix is expected to engage in a valuation race against Micron in the United States during the second half of the year.

The expected timing for SK Hynix’s ADR listing is after July. The primary goal is to re-evaluate its corporate value in the United States, the largest AI market. The local peer group in the US is Micron, but as of the first quarter, SK Hynix's operating profit generation capacity was higher than Micron's.

The industry estimates that SK Hynix will raise 40 trillion won through the ADR. Beyond the re-evaluation of corporate value, this could serve as an opportunity to support SK Hynix's goal of securing 100 trillion won in net cash. This is because ample cash will allow the company to continuously increase astronomical facility investments and R&D expenses.

In fact, SK Hynix’s R&D expenditure trend showed a 35.9% increase last year to reach 6.7325 trillion won, and in the first quarter of this year, it injected 2.5505 trillion won, a 65.2% increase year-on-year. This upward trend is a common trajectory among global corporations competing for hegemony. Micron has also decided to invest up to $100 billion (approx. 152 trillion won) over the next 20 years to establish a semiconductor plant in Clay, north of Syracuse, New York, and plans to invest a total of $200 billion (approx. 305 trillion won) to expand memory production and research and development (R&D) within the United States, including the plant.

Meanwhile, SK Hynix's stock price rose 6.51% on this day, closing at an all-time high of 2,685,000 won, continuing from the previous day. Securities firms are putting out target stock prices as high as 3.8 million won. The estimated operating profit for the second quarter of this year is approximately 63 trillion won, with forecasts indicating that the operating profit margin will reach a staggering 76%.

                                                                                                             Ahn So-yeon