[Edaily Reporter Kim Kyung-eun ] Although SK hynix(000660)plummeted by more than 12% on the 23rd, some analysts suggest that investors should view this as a buying opportunity. They note that expectations for improved earnings remain valid, as supply shortages driven by growing demand for artificial intelligence (AI) memory are projected to persist until at least 2027.

On the 24th, KB Securities maintained its target price of 3.8 million won and “Buy” investment rating for SK hynix. The firm believes there is a high likelihood of further upward revisions to earnings estimates for the second half of this year due to structural changes in memory demand.

Kim Dong-won, Head of Research at KB Securities, stated, “At this point, the only thing that has changed is investor sentiment; industry conditions and earnings are actually improving,” adding, “We view the recent stock price correction as an opportunity to increase holdings.”

KB Securities specifically forecast that the supply shortage in the memory market is likely to intensify further in 2027. Even if new factories are built, production capacity is expected to be concentrated on High-Bandwidth Memory (HBM), limiting the expansion of general-purpose memory production. Consequently, the firm predicts it will be difficult to fully absorb the growing demand for AI memory.

Kim, the division head, noted, “As of June, we estimate that the fulfillment rate for our clients’ memory demand is only around 50%,” adding, “The supply shortage is worsening, and the upward trend in memory prices is expected to continue.”

He continued, “The 2027 HBM price, which is currently under negotiation, is expected to reflect a narrowing margin gap with general-purpose DRAM,” adding, “Prices are projected to rise by more than 100% year-over-year.”

The earnings outlook is also positive. KB Securities expects the company to post earnings that exceed market expectations in the second quarter, driven by price increases of more than 50% for both DRAM and NAND flash, as well as higher sales volumes. It estimated second-quarter operating profit at 69 trillion won—an approximately eightfold increase year-over-year—with an operating profit margin of 77.2%.

Regarding the 12.47% plunge in SK hynix’s stock price the previous day, the firm attributed it to a contraction in investor sentiment rather than a deterioration in fundamentals. The analysis suggests that a combination of factors played a role, including the possibility of U.S. interest rate hikes and concerns over the company’s failure to be included in the Morgan Stanley Capital International (MSCI) developed markets index.

KB Securities projected that NVIDIA’s next-generation AI platform, “Vera Rubin,” scheduled for release in the second half of this year, will serve as an additional growth driver for SK hynix. Since the cost share of memory in the Vera Rubin platform is expected to increase more than fivefold compared to its predecessor, Blackwell, the firm predicted that SK hynix—which is expanding its supply of next-generation memory products such as HBM4 and SOCAMM—will be the biggest beneficiary.

Kim, the division head, added, “The listing of American Depositary Receipts (ADRs) scheduled for August is expected to narrow the valuation gap with Micron and serve as a catalyst for future growth in SK hynix’s stock price.”