"Next year will be the most out-of-stock year for storage"! SK Hynix CEO: Supply exceeds demand or may continue beyond 2030!
On the evening of Friday (July 10) Eastern Time, SK Hynix CEO Kwak Noh-jung predicted that 2027 will be the tightest supply year in the history of the storage industry. "Customers are now coming to SK hynix for long-term supply agreements. Demand continues to grow, but our production capacity is limited. Although we are doing our best to expand production capacity, customer demand may still be higher than the company's supply capacity even after 2030," he said.
On the evening of Friday (July 10) Eastern Time, SK Hynix CEO Kwak Noh-jung predicted that 2027 will be the tightest supply year in the history of the storage industry. "Customers are now coming to SK hynix for long-term supply agreements. Demand continues to grow, but our production capacity is limited. Although we are doing our best to expand production capacity, customer demand may still be higher than the company's supply capacity even after 2030," he said. However, domestic industry investors who have had contact with Korean storage manufacturers told a reporter from the Securities Times that in addition to their own development, executives of major overseas storage manufacturers are also paying attention to the production expansion progress of Chinese storage manufacturers. The domestic "two storages" (Changxin Storage and Yangtze Memory) may become the biggest long-term variable in the future storage market. Approximately 15% premium over Korean stocks Guo Luzheng's above-mentioned views were expressed after the listing of SK Hynix's American Depositary Receipts (ADR). This Korean memory chip manufacturer made its Nasdaq debut on July 10. According to regulations, SK Hynix started trading in the "when-issued" ("pre-release") manner on that day, with the temporary code SKHYV (it is expected that trading will return to normal on July 13, and the code will be changed to SKHY). In terms of market performance, the ADR opened at US$170 on the first day, an increase of approximately 14.1% from the issue price of US$149. It hit an intraday high of US$177 and closed at US$168.01, an increase of 12.76%. According to calculations by a reporter from Securities Times, this is about a 15% premium over its Korean stocks on Friday (the issue price is already about 3% higher than the closing price of Korean stocks on July 8); the corresponding market value reaches US$1.22 trillion. The overall fundraising scale of SK Hynix is approximately US$26.5 billion, surpassing the US$25 billion fundraising record set by Alibaba in 2014, becoming the largest IPO by a foreign company in the United States, and the subscription multiple exceeded seven times. According to disclosures, the funds raised from the IPO will be mainly used for: Fab 1 factory in Yongin Complex and P&T7 advanced packaging factory in Cheongju, purchasing photolithography machines, etc. Although the IPO comes at a time of significant adjustment in the global semiconductor sector, Micron Technology, SanDisk, etc. have fallen by more than 20% in the past few weeks, and SK Hynix's share price on the Korean Stock Exchange has also adjusted by more than 25% from the end of June to July 9. However, the oversubscription of the company's ADR and the double-digit rise on the first day of trading on Nasdaq seem to be rekindling investors' continued enthusiasm for the AI memory theme. Dan Coatsworth, head of marketing at AJ Bell, believes that SK Hynix's "market demand for this U.S. stock issuance is stronger than some people expected. This shows that the rise in the memory chip sector may be just a temporary pause, rather than a peak." Talking about future plans, Guo Luzheng said that the United States is still one of the company's several candidate locations for future wafer manufacturing investment, but the location must meet the company's standards in terms of power, water resources, and talent. “One of the purposes of the issuance is to establish closer cooperative relationships with AI customers and expand access to AI talents,” he said. SK Group Chairman Choi Tae-won said that demand will grow exponentially in the future. If the company can obtain sufficient returns to attract investors, it does not rule out the possibility of further issuance of U.S. stocks. At the same time, the memory maker is considering new ways to sell its technology, including a "memory as a service" concept. Cui Taiyuan revealed that in the future, customers will be advised to rent storage resources instead of purchasing chips directly to solve the AI-related memory capacity bottleneck. The agency expects HBM prices to double in 2027 SK Hynix is the world's largest manufacturer of HBM chips. HBM is a high-performance dynamic random access memory (DRAM) based on 3D stacking technology. This type of chip is a key component for large-scale data processing in GPUs from companies such as Nvidia and AMD. The explosive growth in AI infrastructure spending has pushed the supply of HBM chips to exceed demand and caused prices to rise sharply, making the memory chip manufacturer one of the hottest investment targets on Wall Street.
According to Gartner, the global storage semiconductor market will grow from US$216 billion in 2025 to US$633 billion in 2026, a year-on-year increase of 192.7%, and will grow at a compound annual growth rate of 86.0% from 2025 to approximately US$748 billion in 2027. This growth is expected to be mainly due to the rapid growth of the HBM field, which is an important part of supporting the computing and storage needs of artificial intelligence. At the same time, the average selling price of DRAM and NAND products has also increased significantly. The agency estimates that HBM's revenue is expected to grow from US$33 billion in 2025 to US$86 billion in 2027, with a compound annual growth rate of 60.5%. In terms of price, on July 10, DigiTimes’ latest report quoted industry insiders as saying that HBM prices are expected to double in 2027 due to the dual factors of explosive demand for AI computing power and structural shortage of production capacity. "The price of next-generation HBM4 may surge from about $2/gigabit in the second half of 2026 to $4 to $5 or even higher." Industry sources said. According to reports, the core of the price increase is due to two major production reasons: First, the HBM4 process is extremely difficult to manufacture, the production cycle is as long as 4 to 6 months, and the initial yield rate is low; secondly, the wafer area required to produce HBM4 is three times that of ordinary DDR5 memory, and the existing production line capacity release space has been greatly compressed. Currently, the world's three major HBM manufacturers - Samsung Electronics, SK Hynix and Micron Technology - are locking in global memory supply by signing long-term agreements with first-tier AI customers for a period of three to five years. From an industry perspective, Counterpoint Research data shows that in the first quarter of this year, SK Hynix captured 58% of the HBM market share, while Micron and Samsung each accounted for 21%. According to IDC data, SK Hynix is also the largest DRAM supplier, with a corresponding market share of 29.1%; the second largest NAND supplier, with a market share of 18.5%. Against the background of high industry prosperity, the performance of the three companies also collectively exceeded expectations. Among them, SK Hynix’s operating income in the first quarter of fiscal year 2026 was 52.58 trillion won, a year-on-year increase of 198%; net profit was 40.35 trillion won, a year-on-year increase of 398%. Operating profit for the quarter was 37.6 trillion won, with an operating profit margin of approximately 72%, setting a new record in its history. This profitability level is not only higher than TSMC's operating profit margin of 58.1% during the same period, but also higher than Nvidia's GAAP operating profit margin of approximately 65.6% in the first fiscal quarter of fiscal 2027 (as of April 26, 2026). Micron Technology's non-GAAP net profit soared to US$28.86 billion in the third fiscal quarter of fiscal year 2026 (as of May 28, 2026), a year-on-year increase of approximately 1,224%; the gross profit margin for the quarter climbed to 84.9%, setting a record high since the company was founded in 1978. The company's management stated in a conference call last month that although its new investment will be mainly used for HBM, advanced DRAM and advanced packaging production capacity construction, it is currently impossible to predict when memory supply will catch up with growing demand. This wording is exactly the same as SK Hynix’s view. Domestic "two deposits" accelerate the pace of IPOs However, Morgan Stanley reminds us to pay attention to medium- and long-term risks, the core of which comes from storage cycle constraints: multiple manufacturers are simultaneously expanding HBM production, and high-end storage capacity will be released intensively after 2028; whether the capital expenditures of cloud manufacturers are lower than expected, etc. Recently, domestic industry investors who have had contact with Korean storage manufacturers told Securities Times reporters that although the global storage market is dominated by Samsung Electronics, SK Hynix and Micron Technology, they are currently paying close attention to the future expansion progress of Chinese storage manufacturers. "The recent news that Apple is seeking approval to purchase DRAM memory chips from Changxin Memory (CXMT) is not groundless. In the long run, the domestic 'two memories' will be the biggest variable in this market. The speed and efficiency of domestic manufacturers in terms of technology improvement and production expansion are likely to exceed expectations." The investor analyzed to reporters.
Judging from the latest IPO progress, on July 9, Changxin Technology officially launched the IPO issuance process of the Science and Technology Innovation Board. The offline subscription date and online subscription date for the company's new shares are scheduled for July 16. The company plans to raise 29.5 billion yuan this time, making it the largest A-share IPO project since 2026. The fund-raising plan will invest in: memory wafer manufacturing mass production line technology upgrade projects, DRAM memory technology upgrade projects, and dynamic random access memory forward-looking technology research and development projects. It is understood that Changxin Technology, as the leader in domestic DRAM, has adopted a "generation-hopping R&D" catch-up strategy on its technical roadmap. In 10 years, it has completed the mass production leap from the first generation to the fourth generation process technology platform. Its products cover the full range of DDR4 and LPDDR4X to DDR5 and LPDDR5/5X, and are widely used in consumer electronics, servers, automotive electronics, industrial control and other fields. According to Omdia data, the company has become the largest DRAM manufacturer in China and the fourth largest in the world in terms of shipments and sales, with a market share of 7.67%. The performance forecast shows that in the first half of 2026, the company is expected to achieve revenue of 110 billion to 120 billion yuan, a year-on-year increase of 612.53% to 677.31%; net profit attributable to the parent company is expected to be 50 billion to 57 billion yuan, with strong profit growth momentum. Driven by the demand for artificial intelligence, the global semiconductor industry's prosperity continues to rise. Analysts believe that Changxin Technology's IPO is expected to promote a new cycle of expansion and upgrading of the domestic storage industry. SemiAnalysis even predicts that Changxin Technology's global market share will reach 17% in 2028. Compared with the production capacity of major overseas manufacturers, there is huge room for subsequent expansion of production. In addition to Changxin Technology, Yangtze Memory has launched listing guidance, and major domestic storage companies will join the capital market in the future. (
According to Gartner, the global storage semiconductor market will grow from US$216 billion in 2025 to US$633 billion in 2026, a year-on-year increase of 192.7%, and will grow at a compound annual growth rate of 86.0% from 2025 to approximately US$748 billion in 2027. This growth is expected to be mainly due to the rapid growth of the HBM field, which is an important part of supporting the computing and storage needs of artificial intelligence. At the same time, the average selling price of DRAM and NAND products has also increased significantly. The agency estimates that HBM's revenue is expected to grow from US$33 billion in 2025 to US$86 billion in 2027, with a compound annual growth rate of 60.5%. In terms of price, on July 10, DigiTimes’ latest report quoted industry insiders as saying that HBM prices are expected to double in 2027 due to the dual factors of explosive demand for AI computing power and structural shortage of production capacity. "The price of next-generation HBM4 may surge from about $2/gigabit in the second half of 2026 to $4 to $5 or even higher." Industry sources said. According to reports, the core of the price increase is due to two major production reasons: First, the HBM4 process is extremely difficult to manufacture, the production cycle is as long as 4 to 6 months, and the initial yield rate is low; secondly, the wafer area required to produce HBM4 is three times that of ordinary DDR5 memory, and the existing production line capacity release space has been greatly compressed. Currently, the world's three major HBM manufacturers - Samsung Electronics, SK Hynix and Micron Technology - are locking in global memory supply by signing long-term agreements with first-tier AI customers for a period of three to five years. From an industry perspective, Counterpoint Research data shows that in the first quarter of this year, SK Hynix captured 58% of the HBM market share, while Micron and Samsung each accounted for 21%. According to IDC data, SK Hynix is also the largest DRAM supplier, with a corresponding market share of 29.1%; the second largest NAND supplier, with a market share of 18.5%. Against the background of high industry prosperity, the performance of the three companies also collectively exceeded expectations. Among them, SK Hynix’s operating income in the first quarter of fiscal year 2026 was 52.58 trillion won, a year-on-year increase of 198%; net profit was 40.35 trillion won, a year-on-year increase of 398%. Operating profit for the quarter was 37.6 trillion won, with an operating profit margin of approximately 72%, setting a new record in its history. This profitability level is not only higher than TSMC's operating profit margin of 58.1% during the same period, but also higher than Nvidia's GAAP operating profit margin of approximately 65.6% in the first fiscal quarter of fiscal 2027 (as of April 26, 2026). Micron Technology's non-GAAP net profit soared to US$28.86 billion in the third fiscal quarter of fiscal year 2026 (as of May 28, 2026), a year-on-year increase of approximately 1,224%; the gross profit margin for the quarter climbed to 84.9%, setting a record high since the company was founded in 1978. The company's management stated in a conference call last month that although its new investment will be mainly used for HBM, advanced DRAM and advanced packaging production capacity construction, it is currently impossible to predict when memory supply will catch up with growing demand. This wording is exactly the same as SK Hynix’s view. Domestic "two deposits" accelerate the pace of IPOs However, Morgan Stanley reminds us to pay attention to medium- and long-term risks, the core of which comes from storage cycle constraints: multiple manufacturers are simultaneously expanding HBM production, and high-end storage capacity will be released intensively after 2028; whether the capital expenditures of cloud manufacturers are lower than expected, etc. Recently, domestic industry investors who have had contact with Korean storage manufacturers told Securities Times reporters that although the global storage market is dominated by Samsung Electronics, SK Hynix and Micron Technology, they are currently paying close attention to the future expansion progress of Chinese storage manufacturers. "The recent news that Apple is seeking approval to purchase DRAM memory chips from Changxin Memory (CXMT) is not groundless. In the long run, the domestic 'two memories' will be the biggest variable in this market. The speed and efficiency of domestic manufacturers in terms of technology improvement and production expansion are likely to exceed expectations." The investor analyzed to reporters.
Judging from the latest IPO progress, on July 9, Changxin Technology officially launched the IPO issuance process of the Science and Technology Innovation Board. The offline subscription date and online subscription date for the company's new shares are scheduled for July 16. The company plans to raise 29.5 billion yuan this time, making it the largest A-share IPO project since 2026. The fund-raising plan will invest in: memory wafer manufacturing mass production line technology upgrade projects, DRAM memory technology upgrade projects, and dynamic random access memory forward-looking technology research and development projects. It is understood that Changxin Technology, as the leader in domestic DRAM, has adopted a "generation-hopping R&D" catch-up strategy on its technical roadmap. In 10 years, it has completed the mass production leap from the first generation to the fourth generation process technology platform. Its products cover the full range of DDR4 and LPDDR4X to DDR5 and LPDDR5/5X, and are widely used in consumer electronics, servers, automotive electronics, industrial control and other fields. According to Omdia data, the company has become the largest DRAM manufacturer in China and the fourth largest in the world in terms of shipments and sales, with a market share of 7.67%. The performance forecast shows that in the first half of 2026, the company is expected to achieve revenue of 110 billion to 120 billion yuan, a year-on-year increase of 612.53% to 677.31%; net profit attributable to the parent company is expected to be 50 billion to 57 billion yuan, with strong profit growth momentum. Driven by the demand for artificial intelligence, the global semiconductor industry's prosperity continues to rise. Analysts believe that Changxin Technology's IPO is expected to promote a new cycle of expansion and upgrading of the domestic storage industry. SemiAnalysis even predicts that Changxin Technology's global market share will reach 17% in 2028. Compared with the production capacity of major overseas manufacturers, there is huge room for subsequent expansion of production. In addition to Changxin Technology, Yangtze Memory has launched listing guidance, and major domestic storage companies will join the capital market in the future. (