RBC Capital Markets said in a research note released on Sunday that with AI demand continuing to outstrip supply, rising high-bandwidth memory (HBM) prices are expected to lift average selling prices, and SK hynix will keep benefiting throughout this prolonged memory upcycle.
RBC expects SK hynix to post third-quarter results slightly above market consensus, forecasting revenue of 101.2 trillion won and adjusted earnings per American Depositary Receipt of 8,917 won, equivalent to US$6.72.
The pricing tailwind is expected to offset currency headwinds, with third-quarter DRAM contract prices up 20% quarter on quarter and possibly rising another 15% in the fourth quarter.
The brokerage believes the current DRAM upcycle has already entered its 14th quarter and will extend for another five quarters, with tight supply conditions persisting through 2027.
The note said HBM prices could climb 80% to 100% in 2027, driving overall DRAM average selling prices higher.
Analysts believe that, supported by yield advantages and execution capabilities, SK hynix will maintain its leadership position in the HBM segment, and that after completing a 40 trillion won buyback program, its ample free cash flow could also support a new round of share repurchases or a special dividend.
Company management is expected to reiterate its optimistic view on industry fundamentals.
RBC reiterated its outperform rating on the stock with a target price of US$200.
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