[Edaily Reporter Kim Hyung-il ] DS Investment & Securities forecast that SK hynix(000660)will maintain high levels of operating profit through 2029, even if memory prices decline after peaking. The firm analyzed that demand for server DRAM and the generational transition to High Bandwidth Memory (HBM) will limit the decline in average selling prices (ASPs) for memory. It maintained its “Buy” rating and target price of 2.64 million won.

On the 10th, Lee Su-rim, an analyst at DS Investment & Securities, maintained her operating profit estimate for SK hynix next year at 443.8 trillion won. Under the base-case scenario, even if cumulative DRAM ASPs decline by 36% and NAND flash ASPs by 44% between 2028 and 2029, operating profit in 2029 is projected to reach 290.3 trillion won—65% of next year’s level.

The outlook for fourth-quarter earnings was also maintained at the previous estimate. Revenue is expected to reach 128.3 trillion won, a 23% increase from the previous quarter, while operating profit is projected to rise 23% to 102.1 trillion won. The operating profit margin is forecast to reach 80%.

DS Investment & Securities’ guidance for the fourth-quarter DRAM bit shipment growth rate (B/G) is in the mid-20% range. The firm analyzed that the early ramp-up of the M15X fab and improved yield for 1c DRAM will contribute to increased shipments of server DRAM and HBM. While HBM bit shipments declined in the third quarter due to a product generation transition, the firm expects the impact of expanded HBM4 sales to be reflected in fourth-quarter earnings.

Furthermore, the firm expects that the reflection of new HBM4 contract prices next year will drive an increase in the average selling price (ASP) of DRAM. Even if prices for general-purpose DRAM begin to decline quarter-over-quarter starting in the second half of the year, the overall DRAM ASP is projected to continue its upward trend due to the expanding share of HBM. HBM4E and custom HBM were also cited as additional factors driving price increases.

In the long term, the firm expects demand for artificial intelligence (AI) servers to underpin memory shipments. DS Securities estimated that global AI server shipments will increase by 30% in 2028, even if the capital expenditure growth rate of four major U.S. cloud service providers (CSPs) slows from 53% in 2027 to 14% in 2028. With both server shipments and memory capacity per server increasing, SK hynix’s DRAM bit shipments are projected to rise by 23% over the two-year period through 2029.