SK hynix profit outlook rises on HBM4 and mobile DRAM

Meritz Securities has raised its target price for SK hynix from 3.1 million won to 3.2 million won, forecasting a third-quarter operating profit of approximately 80 trillion won. This estimate exceeds the market consensus of 74 trillion won.

Analysts suggest that while a high proportion of High Bandwidth Memory (HBM) sales previously limited average selling price increases, the upcoming rollout of HBM4 is expected to significantly boost profit contributions. Additionally, renegotiations of long-term supply agreements (LTA) for mobile DRAM are creating more favorable pricing conditions for suppliers. Meritz predicts mobile DRAM prices could surge by 65% in the first quarter of next year.

Growth is expected to broaden from HBM to general-purpose DRAM and NAND flash. For the third quarter, DRAM operating profit is estimated at 63 trillion won, with NAND at 17 trillion won. Looking ahead, the firm anticipates a clear memory supply shortage by 2027, driven by sustained large-scale investments from big tech companies in artificial intelligence.