SK Hynix's Rally Faces a Two-Front Challenge: Record Demand and a Price War from China

The South Korean chipmaker is running at full throttle. On Friday, SK Hynix shares closed at 2,333,000 KRW, marking a 1.92% gain and a fresh 52-week high. The rally has been staggering: the stock has surged 20.20% over the past seven days, 80.43% over the last 30 sessions, and an eye-popping 244.61% since the start of the year.

But beneath the surface momentum, a pair of forces are shaping the narrative. One is the insatiable hunger for high-bandwidth memory (HBM) from AI hyperscalers — a tailwind that analysts at KB Securities believe will persist for years. The other is an increasingly aggressive Chinese competitor quietly undercutting the company on standard DRAM.

The HBM Supply Squeeze Intensifies

KB Securities lifted its price target on SK Hynix to 3.8 million KRW on May 29, up from 3.0 million — a 26.6% jump. The broker maintained its buy rating and now holds the highest target on the Street. The upgraded view rests squarely on HBM pricing and availability.

Demand for HBM, the critical chip that powers AI data centers, far outstrips supply. KB Securities estimates that the fulfillment rate for customer orders sits at just 50%. The bottleneck is expected to persist at least through 2028. As a result, the firm forecasts that HBM prices could more than double on a year-over-year basis in 2026.

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That pricing power is feeding directly into earnings estimates. KB Securities’ research chief, Kim Dong-won, raised the operating profit forecast for 2027 to 454 trillion KRW. He described the current memory cycle as a marathon in which the industry has only passed the five-kilometer mark.

A Chinese Rival Moves In

While SK Hynix rides the AI wave, ChangXin Memory Technologies (CXMT) is quietly building a beachhead in the commodity DRAM market. The Chinese company has doubled its global DRAM market share to 8% from 3% a year ago. On May 27, CXMT cleared the review for an IPO on the Shanghai STAR Market, with plans to raise around 295 billion yuan — equivalent to about 6.5 trillion KRW.

The threat is real. CXMT is undercutting SK Hynix and Samsung on standard DRAM by 15% to 20%. Both South Korean giants have shifted their focus to HBM, leaving the volume segments vulnerable. This is a classic flanking strategy: attack where the leader is least protected.

The AI Partnership Buffer

SK Hynix is not standing still. On the very day after the CXMT IPO news broke, the company was confirmed as a participant in the Series H funding round for Anthropic, the AI research firm that raised $65 billion at a $965 billion valuation. SK Hynix supplies the HBM chips that power Anthropic’s large language models.

Analysts view this as a strategic hedge. Long-term supply agreements with top-tier AI players reduce exposure to the volatile commodity chip market. It also underscores the company’s technological lead in HBM — a lead that Nvidia relies on for its training and inference systems.

Record Numbers Tell the Story

The first quarter of 2026 was nothing short of extraordinary. SK Hynix reported an operating profit of 37.6 trillion Won, a 400% leap from the same period a year earlier. Revenue doubled to 52.6 trillion Won, and the operating margin hit 72%. Chip prices surged 100% quarter over quarter, and analysts expect another 63% jump in Q2. Every HBM production slot for the full year is already spoken for.

The stock’s rally has also reshaped the KOSPI landscape. Based on closing prices on May 28, SK Hynix’s market cap reached 93.2% of Samsung Electronics’ — a record narrow gap of just 119.5 trillion KRW. That gap widened again on Friday after Samsung shares jumped 5.84%, but the underlying trend is clear: investors increasingly view SK Hynix as the purest play on the AI infrastructure boom.

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At 8,476 points, the KOSPI itself closed at an all-time high last Friday. The combined weight of Samsung and SK Hynix in the benchmark has never been larger, making the index more sensitive to every shift in memory pricing and AI demand.

The Fine Balance

The pressure from China is mounting, but it lands at a moment of peak strength. CXMT’s price war targets the standard chip market, not the HBM segment where SK Hynix holds a technological moat. And with supply tight across both DRAM and NAND through at least 2028, the company has time to navigate the competitive landscape.

Meanwhile, SK Hynix is exploring a U.S. listing and expanding globally. The central question for investors is no longer whether the company can survive the challenge, but how long the fat margins in commodity chips will hold before the Chinese competitor forces a squeeze.

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