SK Hynix Plunges from “Peak Performance” to Circuit Breaker in One Day—Has the Memory Super Cycle Peaked?
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SK Hynix Plunges from “Peak Performance” to Circuit Breaker in One Day—Has the Memory Super Cycle Peaked?
Both Counterpoint and TrendForce point to the second half of 2027 as the earliest inflection point for supply-demand dynamics, with fundamental support remaining in place until then.
Navigating Web3 tides with focused insightsAuthor: Kuli, TideFlow Research
TideFlow Insight: On June 22, SK Hynix’s market capitalization surpassed Samsung Electronics’ for the first time in 26 years; the next day, South Korea’s stock market triggered its circuit breaker, and the semiconductor sector suffered panic selling.
Yet on that same day, a research firm released a forecast predicting the global memory market will exceed $1.5 trillion by 2027, with server memory’s share expanding to 57%, and supply shortages persisting at least through the second half of next year.
Where exactly are we in this supercycle? When will the price inflection point arrive? Capacity expansion plans from Samsung, SK Hynix, and Micron provide timing clues—pointing to the second half of 2027 and beyond.
On June 23, South Korea’s stock market delivered a textbook case of “euphoria to panic.”
The previous day, SK Hynix’s intraday market cap hit approximately $1.35 trillion—surpassing Samsung Electronics to become South Korea’s most valuable company for the first time in 26 years—and closed up 5.6%. Yet just one trading day later, the KOSPI 200 futures plunged 5%, triggering the circuit breaker mechanism, while both Samsung and SK Hynix faced panic selling. According to TradingKey, immediate triggers included concerns over AI competitiveness following executive changes at Google, and regulatory scrutiny of excessive concentration of semiconductor-related leveraged financial products in South Korea, leading to forced liquidations.
This sharp volatility coincided precisely with an optimistic industry forecast.
Counterpoint Research’s Memory Tracker data, released on June 23, shows the global memory market (DRAM + NAND) will continue expanding through the first half of 2027, exceeding ₩2,100 trillion (approximately $1.5 trillion), with server memory’s share rising from under 50% in 2025 to 57%.
One side features extreme market volatility at elevated levels; the other points to persistent supply shortages. For investors focused on the memory sector, this moment marks a critical divergence.
Memory chip profit margins dwarf NVIDIA’s—but the supply-demand gap remains the true pricing anchor
To understand current memory stock valuations, start by examining just how strong fundamentals are.
SK Hynix’s Q1 2026 revenue reached $52.58 billion (converted at prevailing exchange rates), up 198% year-on-year. Operating profit stood at $37.61 billion, up 405% YoY, with an operating margin of 72%—exceeding NVIDIA’s 65% for the same period and setting a new record for semiconductor manufacturing.
According to CNBC, Counterpoint Research analyst MS Hwang commented that Q1 earnings revealed AI inference demand for memory far exceeded expectations, prompting companies to fiercely compete for available supply.
This extraordinary profitability stems from structural supply-demand imbalance.
A Goldman Sachs report from April estimates the global DRAM supply-demand gap will widen from 3.3% to 4.9%—the most severe in 15 years. Samsung, SK Hynix, and Micron collectively control over 95% of global DRAM capacity, yet nearly all incremental output is being absorbed by AI applications.
Per TrendForce data, DRAM contract prices surged 90%–95% quarter-on-quarter in Q1 2026; although Q2 gains narrowed to 58%–63%, NAND flash contract prices accelerated further, rising 70%–75% QoQ.
HBM (High Bandwidth Memory) sits at the core of this price surge. This vertically stacked DRAM technology—designed specifically for AI accelerators—consumes roughly three times the wafer area per 1GB compared to standard DDR5, yet each stacked module sells for $300–$500, delivering profit margins three to five times higher than conventional DRAM. SK Hynix currently holds ~57%–62% of the global HBM market and serves as NVIDIA’s primary supplier for AI accelerators.
Goldman Sachs estimates SK Hynix has already secured about two-thirds of NVIDIA’s next-generation Rubin platform HBM4 orders. In March, SK Group Chairman Choi Tae-won publicly stated that the global semiconductor wafer shortage could persist until 2030, noting that expanding capacity requires at least four to five years—and that the shortfall may exceed 20%.
Thus, from a fundamental standpoint, shortages will likely persist for another one to two years, and these two firms combined control ~70% of global DRAM capacity—meaning the supply-demand gap won’t change materially in the near term.
Inflection timeline: New capacity concentrated after H2 2027
In its report, Counterpoint explicitly warns: Once new capacity becomes visible, the risk of sharp price declines cannot be ruled out. The specific timeline is as follows:
Micron has raised its FY2026 capex to $20 billion; its new wafer fab in Idaho is scheduled to begin production mid-2027, and its Singapore HBM packaging facility will contribute capacity the same year. Samsung’s Pyeongtaek P5 factory is expected to go online in 2028. SK Hynix’s M15X facility will commence operations mid-2027, and the company has announced a ₩19 trillion investment to build a new plant.
Yet expansion remains far slower than demand growth.
Goldman Sachs estimates U.S. data center storage demand will grow 9%–12% annually from 2027–2028, while domestic capacity expansion will only reach ~2%–4%. Meanwhile, HBM4 will further intensify supply-demand tension—each HBM4 stack requires 16 DRAM dies instead of 12, increasing DRAM consumption per AI accelerator chip by 33%.
TrendForce’s outlook aligns: HBM3E remains the dominant shipment product today; HBM4 has begun contributing revenue, but delayed AI chip upgrades and inventory buildup are slowing momentum. The real price adjustment window may open between H2 2027 and 2028.
Prior to that, the absolute level of the supply-demand gap continues supporting high prices and high margins. Afterward, concentrated new capacity coming online—combined with potential slowdowns in AI investment—will begin accumulating downside price risk.
Counterpoint emphasizes that LTA (Long-Term Agreement) lock-in volumes, customized HBM strategies, and the speed of next-generation process node transitions will determine market share battles among suppliers. In other words, even if overall growth slows, competitive dynamics among the top three remain intensely fluid.
What does this mean for current holders—and for those waiting on the sidelines?
The June 22 market-cap milestone and June 23 circuit breaker encapsulate the memory sector’s core tension:
Fundamentals remain accelerating—for example, SK Hynix’s Q1 operating margin hit 72%, and the supply-demand gap is the widest in 15 years—yet valuations have already priced in extremely optimistic expectations (SK Hynix is up over 340% YTD), and excessive concentration of leveraged products amplifies volatility in either direction.
Both Samsung and SK Hynix warned in their earnings reports that memory shortages are expected to persist at least through 2027.
Samsung’s memory division head Kim Jaejune noted fulfillment rates have fallen to historic lows, with customers scrambling to secure future supply. Yet markets are already pricing in the flip side of risk: the Bank of Korea’s hawkish tilt amid the semiconductor supercycle, and South Korean government bonds ranking last globally.
Publicly available data shows 38 analysts covering SK Hynix issue a consensus rating of “Strong Buy,” with a 12-month average target price of ~₩2.71 million. Hanwha Investment & Securities recently raised its target price from ₩1.63 million to ₩4.3 million.
Based on widely published analyses, the broad consensus is:
- For current holders: Counterpoint and TrendForce both point to H2 2027 as the earliest possible supply-demand inflection point; fundamentals remain supportive until then. However, forced liquidations triggered by leveraged ETFs represent exogenous shocks unrelated to fundamentals—making position sizing more critical than directional calls.
- For those waiting on the sidelines: The transmission of memory shortages to consumer electronics has just begun. Margin pressure on smartphone and PC brands—and contraction of low-end product lines—are near-term certainties over the next two to three quarters. Shorting names along this transmission chain may carry lower risk than chasing memory stocks at current highs.
Note: This article synthesizes publicly available information and analytical perspectives. All referenced stocks, ratings, and target prices derive from public sources and reflect time-sensitive data. It does not constitute investment advice. Markets carry risk; decisions must be made independently.
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