Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Equity Bottom-Up

<ul>
<li>SK hynix announced their second-highest revenue and operating profit for the first quarter of 2025</li>
<li>Much of the company's performance is the result of its first-mover advantage and excellent execution in the HBM market</li>
<li>Two issues threaten the company: AI growth may stall, and tariff changes could interfere with the company's global supply chain</li>
</ul>


SK hynix announced their second-highest revenue and operating profit for the first quarter of 2025
Much of the company's performance is the result of its first-mover advantage and excellent execution in the HBM market
Two issues threaten the company: AI growth may stall, and tariff changes could interfere with the company's global supply chain


SK Hynix Earnings Highlights Strong AI Dependence and Tariff Concerns

Technology / Semiconductor / Internet Research

Nicolas Baratte

<ul>
<li>Same as last quarter: very strong AI / Server demand, capacity sold out for 12 months, HBM3E 12Hi becomes majority in 2Q25. HBM is the only driver. </li>
<li>Everything else remains weak. The conundrum remains: there is only 1 driver: AI / HBM. SK Hynix is the leading vendor, 12-18 months ahead of competitors. Is it sustainable? </li>
<li>The market thinks not sustainable and the stock is very cheap at 5x 2025 4x 2026 EPS. SK Hynix still trades like a cyclical stock – is it?</li>
</ul>


Same as last quarter: very strong AI / Server demand, capacity sold out for 12 months, HBM3E 12Hi becomes majority in 2Q25. HBM is the only driver. 
Everything else remains weak. The conundrum remains: there is only 1 driver: AI / HBM. SK Hynix is the leading vendor, 12-18 months ahead of competitors. Is it sustainable? 
The market thinks not sustainable and the stock is very cheap at 5x 2025 4x 2026 EPS. SK Hynix still trades like a cyclical stock – is it?


SK Hynix: Record-High Profits, the Stock Gets Cheaper.

<ul>
<li>SK hynix derived ~25-30% of revenues from AI in 2024 (HBM, LP-DDR, eSSD). AI revenues will double in 2025. SK hynix’s lead, both roadmap, manufacturing, qualifications extends to 2026.</li>
<li>AI high growth also allows SK hynix to lower its exposure to commodity PC, Mobile, consumer segments. Hence, margins likely continue to increase in 2025-26.</li>
<li>Sk hynix’s lead over Samsung is sustainable for at least 2025-26.  AI-related ASP / margins aren’t cyclical, unlike commodity memory. The stock trades at a miserable 6x 2025 EPS.</li>
</ul>


SK hynix derived ~25-30% of revenues from AI in 2024 (HBM, LP-DDR, eSSD). AI revenues will double in 2025. SK hynix’s lead, both roadmap, manufacturing, qualifications extends to 2026.
AI high growth also allows SK hynix to lower its exposure to commodity PC, Mobile, consumer segments. Hence, margins likely continue to increase in 2025-26.
Sk hynix’s lead over Samsung is sustainable for at least 2025-26.  AI-related ASP / margins aren’t cyclical, unlike commodity memory. The stock trades at a miserable 6x 2025 EPS.


SK Hynix Will Derive ~50% of Revenues from AI in 2025. Why Is the Stock Trading at 6x 2025 EPS?

Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

<ul><li>Dassault Systèmes CEO highlights European automaker struggles and growth readiness in US and Asia in January 2025.</li><li>SK Hynix achieves impressive 70% yield in HBM4 testing, signaling advancements in memory technology.</li><li>China's tungsten export controls cause market price fluctuations, disrupting global supply chains. Foxconn partners with Sonora in Mexico for innovative smart city project.</li></ul>

Dassault Systèmes CEO highlights European automaker struggles and growth readiness in US and Asia in January 2025.SK Hynix achieves impressive 70% yield in HBM4 testing, signaling advancements in memory technology.China's tungsten export controls cause market price fluctuations, disrupting global supply chains. Foxconn partners with Sonora in Mexico for innovative smart city project.

Tech Supply Chain Tracker (28-Feb-2025): Jan 2025 notebook shipment update

<ul><li>TSMC implements restrictions on Chinese IC firms to follow US semiconductor controls, limiting access to advanced chip technologies.</li><li>Estonian defense delegation seeks collaboration with Taiwan on drones, highlighting growing partnership between the two countries.</li><li>ASE faces leadership uncertainty after chairman's heir tragically passes away, impacting the future direction of the semiconductor giant.</li></ul>

TSMC implements restrictions on Chinese IC firms to follow US semiconductor controls, limiting access to advanced chip technologies.Estonian defense delegation seeks collaboration with Taiwan on drones, highlighting growing partnership between the two countries.ASE faces leadership uncertainty after chairman's heir tragically passes away, impacting the future direction of the semiconductor giant.

Tech Supply Chain Tracker (09-Feb-2025): TSMC tightens restrictions on Chinese IC firms.

South Korea

SK Hynix Inc. provides products and services for the electronic components industry. The Company manufactures semiconductors, such as dynamic random access memory (DRAM), NAND flash memory, and static random access memory (SRAM) chips.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

SK Hynix (000660 KS)

SK Hynix Earnings Highlights Strong AI Dependence and Tariff Concerns

SK hynix reported strong Q1 results driven by HBM market success. But the company faces challenges from a potential AI growth slowdown, and the...

Jim Handy

SK Hynix: Record-High Profits, the Stock Gets Cheaper.

Strong AI and server demand driving SK Hynix's success, but market questions sustainability of HBM as stock remains undervalued.

Nicolas Baratte

SK Hynix Will Derive ~50% of Revenues from AI in 2025. Why Is the Stock Trading at 6x 2025 EPS?

SK hynix's AI revenues set to double in 2025, leading in roadmap and manufacturing, with sustainable lead over Samsung and potential for increased...

Nicolas Baratte

Tech Supply Chain Tracker (28-Feb-2025): Jan 2025 notebook shipment update

January 2025 notebook shipment update; Dassault Systèmes CEO comments on European automakers, SK Hynix achieves 70% yield in HBM4 testing, China's...

Tech Supply Chain Tracker

Tech Supply Chain Tracker (09-Feb-2025): TSMC tightens restrictions on Chinese IC firms.

TSMC restricts Chinese IC firms, Estonia looks to collaborate with Taiwan on drones, ASE deals with leadership uncertainty, Taiwan's software...

Tech Supply Chain Tracker

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

SK Hynix Earnings Highlights Strong AI Dependence and Tariff Concerns

​SK hynix reported strong Q1 results driven by HBM market success. But the company faces challenges from a potential AI growth slowdown, and the...

Jim Handy

SK Hynix: Record-High Profits, the Stock Gets Cheaper.

​Strong AI and server demand driving SK Hynix's success, but market questions sustainability of HBM as stock remains undervalued.

Nicolas Baratte

SK Hynix Will Derive ~50% of Revenues from AI in 2025. Why Is the Stock Trading at 6x 2025 EPS?

​SK hynix's AI revenues set to double in 2025, leading in roadmap and manufacturing, with sustainable lead over Samsung and potential for increased...

Nicolas Baratte

Tech Supply Chain Tracker (28-Feb-2025): Jan 2025 notebook shipment update

January 2025 notebook shipment update; Dassault Systèmes CEO comments on European automakers, SK Hynix achieves 70% yield in HBM4 testing, China's...

Tech Supply Chain Tracker

Tech Supply Chain Tracker (09-Feb-2025): TSMC tightens restrictions on Chinese IC firms.

TSMC restricts Chinese IC firms, Estonia looks to collaborate with Taiwan on drones, ASE deals with leadership uncertainty, Taiwan's software...

Tech Supply Chain Tracker

SK hynix reported strong Q1 results driven by HBM market success. But the company faces challenges from a potential AI growth slowdown, and the...

Strong AI and server demand driving SK Hynix's success, but market questions sustainability of HBM as stock remains undervalued.

SK hynix's AI revenues set to double in 2025, leading in roadmap and manufacturing, with sustainable lead over Samsung and potential for increased...