Semiconductor Manufacturing: SK Hynix Nears $1tn Market Cap
SK Hynix is approaching the US$1tn market capitalisation threshold as demand for AI infrastructure continues to grow.
The company was valued at less than US$100bn around a year ago.
Shares in SK Hynix have risen more than 200% this year, following an increase of 274% in 2024.
The company's growth is driven by demand for conventional memory chips and high bandwidth memory (HBM) chips used in AI servers.
If the company reaches the US$1tn milestone, South Korea will become the first country outside the US to have more than one trillion-dollar company.
South Korea's market position
Taiwan's TSMC remains the biggest company in Asia by market value at more than US$1.622tn.
The Korea Composite Stock Price Index, the representative stock market index of South Korea, broke 7,000 for the first time.
This occurred after Samsung Electronics crossed US$1tn on 6 May, becoming only the second Asian company to do so after TSMC.
Fabien Yip, a Market Analyst at IG in Sydney, says: “My theory is that the market is running on FOMO sentiments, especially on AI-related names in Japan and Korea.”
HBM market leadership position
SK Hynix currently commands the lion's share of the HBM market, a specialised type of memory that stacks dynamic random-access memory (DRAM) chips vertically.
Its proximity to the graphics processing unit (GPU) allows for fast data transfer speeds, which is essential for training large language models.
Without this hardware, the chips produced by NVIDIA, Google and AMD would face performance throttling.
In October 2024, the SK Hynix CFO confirmed that the entire HBM production capacity for 2026 was already sold out.
This backlog highlights a shift in industry dynamics. Major tech firms are now securing hardware years in advance to ensure they are not left behind in the AI race.
This shortage will likely persist into 2027 as demand continues to outpace manufacturing yield.
SK Hynix aims to capitalise on this supply dominance and the labour disputes at Samsung to secure its market lead, helping it cement its membership in the trillion dollar league.
