A research report released by JPMorgan Chase on March 8, 2026, documented the key statements made by SK Hynix management at the JPMorgan Korea Conference. JPMorgan maintained its Overweight rating on SK Hynix, with a target price of 1.25 million Korean won, implying approximately 35% upside potential from the current share price of 926,000 won. For investors, the conference conveyed several critical signals:
The duration of the memory market upcycle is expected to exceed market expectations, with significant supply-demand gaps present in both DRAM and NAND segments. The HBM business maintains a strong leadership position, with the HBM4 mass production timeline unchanged and profitability targets consistent with the previous year. Leading manufacturers are shifting their strategic focus to a "fab-first" approach, with an infrastructure capital expenditure plan of approximately 22 trillion won demonstrating a long-term commitment to capacity expansion. Shareholder returns are increasing, as the company announced a 1 trillion won special dividend and a treasury share cancellation plan in January 2026, sending a positive signal.
**Upswing Duration to Exceed Expectations** SK Hynix management systematically elaborated on multiple factors driving the anticipated extended duration of the memory upcycle:
The rise of customized memory solutions: Customized products, represented by HBM (High Bandwidth Memory), are reshaping the memory market landscape. Changes in wafer and supply economics due to HBM: The "wafer-to-die penalty" concept means HBM consumes a larger proportion of production capacity. Extension of AI inference demand to traditional DRAM/NAND: The expansion of AI application scenarios is broadening memory demand from high-end HBM to conventional DRAM and NAND.
Regarding supply and demand, management clearly stated that both DRAM and NAND face severe supply-demand gaps, and the price increase trend is expected to persist for the foreseeable future. Currently, inventories at both supplier and channel customer levels are below average, with bit shipment growth essentially matching bit production growth. **Investor Focus on LTAs and Cycle Sustainability** At the conference, investors showed strong interest in Long-Term Supply Agreements (LTAs) and cycle sustainability. Management characterized the current memory industry as being in a phase of business model transformation and identified maintaining the memory upcycle as the top strategic priority. Regarding the LTA framework, management emphasized:
More binding bilateral agreements are crucial for enhancing revenue and cash flow visibility. Key considerations include locking in supply volumes and price ranges to ensure predictability of supply contracts. LTAs are typically multi-year agreements (exceeding three years).
JPMorgan assesses that SK Hynix is adopting a more balanced LTA strategy, seeking equilibrium between B2B and B2C customer structures while maintaining a relatively conservative pricing approach. **Solid HBM Leadership and More Aggressive Capital Returns** SK Hynix reiterated its overall HBM business plan for the year, with the HBM4 mass production ramp-up schedule unchanged (JPMorgan expects HBM4 bit shipments to crossover in the third quarter of 2026). The company expressed strong confidence in maintaining its HBM leadership, primarily relying on: deep collaboration with ecosystem partners, including cooperation with a leading foundry on logic chip design and manufacturing; and clear visibility of its technology roadmap. Regarding pricing, SK Hynix reaffirmed that HBM bit shipments and pricing are negotiated annually, with the goal of maintaining profitability levels similar to the previous year. Despite a significant rebound in D5/LPD5 prices since the fourth quarter of 2025, the company sees almost no possibility of renegotiating 2026 contract volumes. Furthermore, SK Hynix demonstrated a more aggressive stance on shareholder returns. After establishing the primary goal of achieving a net cash position, the company retains flexibility for the early distribution of additional shareholder returns. This undoubtedly sends a strong positive signal—management is confident in the strength and duration of the current memory cycle, possessing clearer cash flow visibility than in previous cycles. **DRAM Capacity Strategy: Fab-First Approach, Phased Yongin Development** SK Hynix further disclosed the strategic rationale behind its approximately 22 trillion won infrastructure capital expenditure plan, centered on a "fab-first" strategy. Specific plans are as follows:
The mass production schedule for Phase 1 of Yongin Fab 1 has been brought forward by three months. The company is focusing on infrastructure construction and cleanroom facilities to ensure flexibility in capacity expansion. The remaining phases (2 through 6) of Yongin Fab 1 will be progressively ready between 2028 and 2030. The design capacity for the Yongin fab disclosed by management is higher than JPMorgan's previous estimate of 270,000 to 350,000 wafers per month (WSPM). The actual scale of capacity build-out may vary depending on memory building design and the deployment timeline for the 1dnm process.
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