Bolstered by persistently strong demand in the artificial intelligence (AI) sector, which has simultaneously driven up prices for both advanced and traditional memory chips, South Korean memory chip giant SK Hynix reported record-breaking quarterly revenue and profit. Data revealed that SK Hynix's revenue for the fourth quarter of 2025 surged 66% year-over-year to 32.827 trillion won, surpassing the analyst consensus estimate of 32.132 trillion won; operating profit skyrocketed 137% to a record 19.2 trillion won, also exceeding the consensus forecast of 17.7 trillion won.
SK Hynix has successfully established an enviable leading position in the high-bandwidth memory (HBM) sector, which is essential for AI chipsets designed by companies like NVIDIA (NVDA), commanding a 61% share of the HBM market. The company stated, "HBM revenue more than doubled year-over-year, making a significant contribution to the company's record performance last year."
Furthermore, the memory chip industry's shift in production capacity towards high-end products like HBM has squeezed the capacity available for traditional memory products; this supply shortage has driven up prices for general-purpose DRAM and NAND chips used in servers, personal computers, and mobile devices, from which SK Hynix has also benefited. According to data from market tracker TrendForce, the contract price for mainstream 16GB DDR5 DRAM chips last quarter increased more than fourfold compared to the same period a year earlier. TrendForce anticipates that contract prices for general-purpose DRAM will rise a further 55% to 60% this quarter compared to the previous quarter.
Once characterized by severe boom-and-bust cycles, the memory chip business is now achieving sustained profitability, a scenario that was nearly unimaginable just a few years ago, while also boosting valuations across the entire industry. Data shows that SK Hynix's stock price has approximately tripled since early September of last year.
SK Hynix also disclosed plans to cancel treasury shares worth approximately 12.24 trillion won (about $86 billion) next month, as part of broader efforts to enhance shareholder returns. The company reiterated that it is considering a US listing but has not yet made a final decision. The company is scheduled to hold an earnings call on Thursday. Another memory giant, Samsung, is also set to announce its full fourth-quarter 2025 results on Thursday.
SK Hynix's robust performance reflects strong market demand for HBM3E, the most advanced version of high-bandwidth memory currently available, which has been adopted by NVIDIA and major cloud computing operators. A report on Wednesday indicated that SK Hynix is the exclusive HBM3E supplier for Microsoft's (MSFT) custom AI chip, Maia 200.
Analyst Cecilia Chan noted that, supported by accelerated HBM4 R&D progress, superior yield rates, and a solid supply agreement with NVIDIA, SK Hynix is well-positioned to consolidate its leadership in the high-bandwidth memory market—a market projected to expand at a compound annual growth rate of approximately 25% through 2030—even as Samsung works to catch up. Its plan to invest 19 trillion won (around $129 billion) in building a chip packaging plant in Cheongju further underscores its confidence in HBM demand and strengthens its market-leading position.
With the company transitioning to a net cash position and demonstrating strong profitability, the improvement in its credit profile should provide upward support for its credit rating, following Moody's upgrade in mid-December last year.
Meanwhile, against the backdrop of a supply-demand imbalance in memory chips, manufacturers like SK Hynix have gained significant pricing power. Richard Clode, Portfolio Manager of the Janus Henderson Global Technology Team, suggested that the current memory chip shortage is likely to persist, driven on one hand by robust demand for next-generation HBM memory consuming more wafer capacity, and on the other by generally tight supply. He added, "From a supply perspective, there is no easy solution or lever to meet this new demand driver. Unlike consumer electronics companies, hyperscale cloud providers and AI customers have a completely different mindset when it comes to paying prices for memory chips."
Nomura analysts judge that the current "memory chip supercycle," which began in the second half of 2025, will last at least until 2027, with truly meaningful new supply unlikely to emerge until early 2028 at the earliest. Nomura stated that investors should continue to overweight leading memory stocks in 2026, treating the "price-profit-valuation" trifecta for memory chips as the main investment theme for the year, rather than viewing memory solely through the single lens of HBM.
Micron Technology is even more optimistic. The company forecasts that the total addressable market for HBM will grow at a compound annual growth rate of approximately 40% through 2028, expanding from around $35 billion in 2025 to roughly $100 billion in 2028; overall NAND demand tends to follow HBM's continued expansion, suggesting the current memory supercycle could potentially last from 2024 through 2028.
A recent research report from J.P. Morgan indicates that the wave of AI inference is enabling NAND flash memory to escape its fate as a "highly cyclical commodity," evolving instead into a high-growth AI infrastructure asset. The bank believes that, driven by the shift in AI workloads from training to inference, coupled with supply bottlenecks for HDDs in nearline storage, the NAND market centered on enterprise SSDs is experiencing unprecedented structural growth. Furthermore, investors are significantly underestimating the strategic importance of NAND in the era of AI inference. J.P. Morgan predicts that the blended average selling price in the NAND sector will surge 40% year-over-year in 2026.
Analysts at Citigroup hold an even more bullish stance. The bank's analysts believe that, driven by the proliferation of AI agents and a surge in memory demand for AI CPUs, memory chip prices will experience runaway increases in 2026. Citigroup analysts have aggressively raised their 2026 average selling price (ASP) growth forecast for DRAM from 53% to 88%, and for NAND from 44% to 74%.
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