Shares in the world’s second-largest memory chip manufacturer climbed 6.5 percent to a record high. This means the group has a market capitalization of 1.184 trillion euros.
SK Hynix logo on a smartphone Reuters/Ann Wang
Add the Press on Google as your preferred news source.
Almost a quarter of a century after a near-bankruptcy SK Hynix became the most valuable listed company in South Korea. Shares of the world’s second-largest memory chip maker rose as much as 6.5 percent to a record high of 2.945 million won in Seoul on Monday. The group thus achieved a market capitalization of the equivalent of 1.184 trillion euros.
The market value of the previous leader Samsung was around 1.159 trillion. Euro. The US competitor Micron most recently came to around 1.116 trillion. Dollar.
Hynix is one of the beneficiaries of the current AI boom. The company is the world’s leading provider of so-called HBM memory (High Bandwidth Memory). These can save and output data particularly quickly. Hynix controls around 61 percent of the global market for these high-performance chips. Samsung and Micron have 17 and 21 percent respectively. In addition, due to the rapid increase in demand, the prices for both HBM and classic storage have multiplied in recent months. This is driving Hynix’s profits from one record high to another. The group wants to double its production within the next five years.
In 2002, Hynix was on the verge of being sold to Micron after the company accumulated large amounts of debt through an aggressive expansion strategy. The share price then temporarily fell to as much as 135 won (0.08 euros). In the decades that followed, the business followed the ups and downs of the memory chip economy. The last industry downturn to date in 2023 caused Hynix an annual operating loss of the equivalent of 4.4 billion euros. The massive investments by technology companies like Microsoft or Google in data centers for artificial intelligence (AI) helped the memory chip manufacturer achieve record earnings of 13.36 billion euros the following year.
According to experts, Hynix’s decision to focus on the development of HBM storage is the key to its current success. These semiconductors are specifically tailored to the respective AI processors with which they are combined. The close technical integration makes it difficult to switch to another memory chip provider. “It used to not matter whether the memory came from Hynix, Samsung or Micron,” explains Chey Tae-won, chairman of the board of Hynix parent company SK Group, in a book. “HBM is different. If SK Hynix’s HBM is replaced by another product, the AI system may no longer function properly. What was once a peripheral component has now become an integral part.” (APA/Reuters)
