SK Hynix CEO: Next year will be the biggest storage shortage in history! The company surged on its first day of listing in the United States. Can it avoid a repeat of Space X's trend?
On the day that South Korean storage giant SK Hynix made its debut on the US stock market Nasdaq, its CEO Guo Luzheng said that the global storage industry is expected to face the most serious supply shortage in history in 2027. On Friday Eastern Time, on the day that South Korean storage giant SK Hynix made its debut on the U.S. stock market Nasdaq, its CEO Guo Luzheng said that the global storage industry is expected to face the most serious supply shortage in history in 2027. He also emphasized that although the company is vigorously expanding production, it is predicted that storage demand will continue to exceed its production capacity for a long time in the next 10 years.
On the day that South Korean storage giant SK Hynix made its debut on the US stock market Nasdaq, its CEO Guo Luzheng said that the global storage industry is expected to face the most serious supply shortage in history in 2027. On Friday Eastern Time, on the day that South Korean storage giant SK Hynix made its debut on the U.S. stock market Nasdaq, its CEO Guo Luzheng said that the global storage industry is expected to face the most serious supply shortage in history in 2027. He also emphasized that although the company is vigorously expanding production, it is predicted that storage demand will continue to exceed its production capacity for a long time in the next 10 years. SK Hynix’s ADR issuance was priced at US$149, a 2.7% premium to the average price of its Korean stocks in the past three trading days, with the largest intraday increase of nearly 19%. Dan Coatsworth, head of marketing at AJ Bell, said: "The demand for this U.S. stock placement far exceeds market expectations, which means that the memory chip market is just a short-term break, not a market peak." The offering is the second-largest equity placement in U.S. stock history, second only to SpaceX’s record-breaking IPO last month. The funds raised will be used by SK Hynix to build a new wafer fab and help the company directly connect with the world's largest investor group. According to people familiar with the matter, the issuance was oversubscribed by more than 7 times. SK Hynix: The biggest storage shortage in history will come next year According to the Financial Associated Press, "We expect next year to be the tightest supply year in the history of the industry...Customer demand continues to grow, while our production capacity is limited. We still expect that even after 2030, customer demand will still be higher than our supply capacity. But we are doing our best to solve this problem." Kuo's remarks came after the South Korean chipmaker's successful listing. SK Hynix has become a key player in the artificial intelligence supply chain with its leading position in the development of HBM used in Nvidia chipsets. 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%. 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 media reports on July 8, subscription demand comes from various types of institutions such as global long-term funds, technology industry special funds, sovereign wealth funds and Asian-themed global investors. Among them, Baillie Gifford, Coatue Management and Situational Awareness Partners have expressed a total subscription intention of up to US$7 billion. The joint lead underwriters of the public offering are Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase. 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. Guo Luzheng also said that the United States is still one of several candidates for its future wafer manufacturing investment, although no decision has been made yet. He said the company will give priority to areas that can provide sufficient land, power, water and skilled workers, as well as competitive manufacturing costs. “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. Today, Guo Luzheng has become a guest in the AI industry. At the Computex in Taipei in early June, Huang Renxun hosted a special banquet at a local Taiwanese restaurant and invited Kuo Luzheng and executives of Korean technology companies such as Samsung Electronics and LG Electronics to attend the banquet. In the same month, Guo Luzheng was invited to attend Microsoft's annual CEO summit. The AI revolution has spawned hundreds of billions of dollars in capital expenditures. The market generally believes that memory chip manufacturers will reap huge profits from this, and funds are pouring into related targets. Thomas Hayes, chairman of Great Hill Capital, said: "Currently, global semiconductors are the main line of transactions in the most crowded market. Investment banks and issuers have accurately captured the strong market demand. The current sector valuation is at a high level, and companies hope to use this window to complete financing." The company, headquartered in Icheon, South Korea, is the world's largest high-bandwidth memory (HBM) manufacturer. AI-specific GPUs produced by Nvidia, AMD and other companies require massive data calculations, and HBM is an indispensable supporting chip. Major technology giants have been frantically purchasing high-end AI processors, which has directly caused HBM to be in short supply and prices to continue to rise, making storage manufacturers the hottest investment target on Wall Street. SK Hynix’s U.S. rival Micron Technology’s stock price has soared 711% in the past 12 months. Analysts believe that SK Hynix’s listing in the United States will broaden its shareholder base, lower transaction thresholds, and narrow the valuation gap between the two companies. Refinitiv data shows that SK Hynix's forward price-to-earnings ratio is only 5.8 times, and Micron's forward price-to-earnings ratio is about 7 times. AI computing power bottleneck shifts to storage Kim Jung-ho, a professor at the Electrical Department of the Korea Advanced Institute of Science and Technology (KAIST), known as the "Father of HBM", recently bluntly stated that the core competitiveness of the AI industry is gradually shifting from GPU to memory. In the past two years, the core narrative of the global AI industry chain has almost always revolved around GPUs. However, as the size of large model parameters, context length, and the amount of inference calls continue to expand, the computing power bottleneck is changing from "whether there is a GPU" to "whether the GPU can obtain fast enough and large enough storage bandwidth." And this is where the value of HBM lies. HBM's technical threshold is very high, and there are only three companies in the world that can mass-produce it: SK Hynix, Samsung Electronics and Micron Technology. Relying on the first-mover advantage of being the first to mass-produce HBM3E and HBM4, SK hynix ranked first with a global HBM market share of 56.4% in the first quarter of 2026. It is the largest HBM supplier of NVIDIA AI accelerators, and SK Hynix chips are everywhere in the data centers of Google and Microsoft. The pricing power brought about by this technical barrier is directly reflected in SK Hynix's gross profit margin - in the first quarter of 2026, the gross profit margin increased by 22 percentage points year-on-year, reaching 79.3%. 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% from 2025 to approximately US$748 billion in 2027. 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%. 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. Sector volatility risks still exist 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. American investors are happy to take this opportunity to directly invest in SK Hynix, South Korea's second largest company (after Samsung Electronics). However, some market participants are worried that with the listing of SK Hynix, the violent fluctuations in the Korean market may be transmitted to Wall Street. The trend of rising and falling since SpaceX went public has also given investors a warning. In recent weeks, the rising momentum of the semiconductor sector has significantly weakened, partly due to investors' concerns about slowing growth in AI capital expenditures. SK Hynix’s Korean stocks have fallen more than 25% from the all-time high hit two weeks ago. Jonathan Klinsky, chief of technical analysis at BTIG, an investment analysis institution, warned that investors had better hope that the iconic violent fluctuations in the Korean stock market will not be transmitted. The total market value of Samsung Electronics and SK Hynix accounts for more than 50% of the total market value of the Korea Composite Index (KOSPI). A slight change in the sentiment of the semiconductor sector will lead to violent fluctuations in the market. South Korea’s Volatility Index soared to 98 at the end of June, while the U.S. VIX was only slightly below 18 during the same period. Chris Watling, chief market strategist at Longview Economics, pointed out that the difference in the U.S.-Korea volatility index was as high as 70 points, setting a record; what is even more alarming is that at that time, the South Korea Composite Index was only one step away from its historical high. Watling said in the research report: "Usually higher volatility corresponds to a decline in risky assets; but sometimes asset prices rise while volatility surges simultaneously, that is, 'rising is accompanied by rising risks.' This is a typical bubble signal." He added that South Korea's volatility surged sharply twice before, corresponding to the stock market crash during the COVID-19 epidemic and the global financial crisis. Klinsky is also cautious: Although the U.S. semiconductor sector has experienced astonishing gains, its fluctuations are equally extreme. "Severe sector fluctuations have become the norm, and this is usually not a good sign for bulls." The recent market trends of Micron Technology and Intel, components of the US Semiconductor Index, have been volatile. Klinski counted the data of the Philadelphia Semiconductor Index: In the past 30 trading days, the index has experienced a single-day increase or decrease of more than 3% 15 times. The last time the same extreme fluctuation occurred was traced back to the Internet bubble period in 2000. Domestic "two deposits" accelerate the pace of IPOs Recently, domestic industry investors who have had contact with Korean storage manufacturers said 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. (
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. Today, Guo Luzheng has become a guest in the AI industry. At the Computex in Taipei in early June, Huang Renxun hosted a special banquet at a local Taiwanese restaurant and invited Kuo Luzheng and executives of Korean technology companies such as Samsung Electronics and LG Electronics to attend the banquet. In the same month, Guo Luzheng was invited to attend Microsoft's annual CEO summit. The AI revolution has spawned hundreds of billions of dollars in capital expenditures. The market generally believes that memory chip manufacturers will reap huge profits from this, and funds are pouring into related targets. Thomas Hayes, chairman of Great Hill Capital, said: "Currently, global semiconductors are the main line of transactions in the most crowded market. Investment banks and issuers have accurately captured the strong market demand. The current sector valuation is at a high level, and companies hope to use this window to complete financing." The company, headquartered in Icheon, South Korea, is the world's largest high-bandwidth memory (HBM) manufacturer. AI-specific GPUs produced by Nvidia, AMD and other companies require massive data calculations, and HBM is an indispensable supporting chip. Major technology giants have been frantically purchasing high-end AI processors, which has directly caused HBM to be in short supply and prices to continue to rise, making storage manufacturers the hottest investment target on Wall Street. SK Hynix’s U.S. rival Micron Technology’s stock price has soared 711% in the past 12 months. Analysts believe that SK Hynix’s listing in the United States will broaden its shareholder base, lower transaction thresholds, and narrow the valuation gap between the two companies. Refinitiv data shows that SK Hynix's forward price-to-earnings ratio is only 5.8 times, and Micron's forward price-to-earnings ratio is about 7 times. AI computing power bottleneck shifts to storage Kim Jung-ho, a professor at the Electrical Department of the Korea Advanced Institute of Science and Technology (KAIST), known as the "Father of HBM", recently bluntly stated that the core competitiveness of the AI industry is gradually shifting from GPU to memory. In the past two years, the core narrative of the global AI industry chain has almost always revolved around GPUs. However, as the size of large model parameters, context length, and the amount of inference calls continue to expand, the computing power bottleneck is changing from "whether there is a GPU" to "whether the GPU can obtain fast enough and large enough storage bandwidth." And this is where the value of HBM lies. HBM's technical threshold is very high, and there are only three companies in the world that can mass-produce it: SK Hynix, Samsung Electronics and Micron Technology. Relying on the first-mover advantage of being the first to mass-produce HBM3E and HBM4, SK hynix ranked first with a global HBM market share of 56.4% in the first quarter of 2026. It is the largest HBM supplier of NVIDIA AI accelerators, and SK Hynix chips are everywhere in the data centers of Google and Microsoft. The pricing power brought about by this technical barrier is directly reflected in SK Hynix's gross profit margin - in the first quarter of 2026, the gross profit margin increased by 22 percentage points year-on-year, reaching 79.3%. 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% from 2025 to approximately US$748 billion in 2027. 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%. 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. Sector volatility risks still exist 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. American investors are happy to take this opportunity to directly invest in SK Hynix, South Korea's second largest company (after Samsung Electronics). However, some market participants are worried that with the listing of SK Hynix, the violent fluctuations in the Korean market may be transmitted to Wall Street. The trend of rising and falling since SpaceX went public has also given investors a warning. In recent weeks, the rising momentum of the semiconductor sector has significantly weakened, partly due to investors' concerns about slowing growth in AI capital expenditures. SK Hynix’s Korean stocks have fallen more than 25% from the all-time high hit two weeks ago. Jonathan Klinsky, chief of technical analysis at BTIG, an investment analysis institution, warned that investors had better hope that the iconic violent fluctuations in the Korean stock market will not be transmitted. The total market value of Samsung Electronics and SK Hynix accounts for more than 50% of the total market value of the Korea Composite Index (KOSPI). A slight change in the sentiment of the semiconductor sector will lead to violent fluctuations in the market. South Korea’s Volatility Index soared to 98 at the end of June, while the U.S. VIX was only slightly below 18 during the same period. Chris Watling, chief market strategist at Longview Economics, pointed out that the difference in the U.S.-Korea volatility index was as high as 70 points, setting a record; what is even more alarming is that at that time, the South Korea Composite Index was only one step away from its historical high. Watling said in the research report: "Usually higher volatility corresponds to a decline in risky assets; but sometimes asset prices rise while volatility surges simultaneously, that is, 'rising is accompanied by rising risks.' This is a typical bubble signal." He added that South Korea's volatility surged sharply twice before, corresponding to the stock market crash during the COVID-19 epidemic and the global financial crisis. Klinsky is also cautious: Although the U.S. semiconductor sector has experienced astonishing gains, its fluctuations are equally extreme. "Severe sector fluctuations have become the norm, and this is usually not a good sign for bulls." The recent market trends of Micron Technology and Intel, components of the US Semiconductor Index, have been volatile. Klinski counted the data of the Philadelphia Semiconductor Index: In the past 30 trading days, the index has experienced a single-day increase or decrease of more than 3% 15 times. The last time the same extreme fluctuation occurred was traced back to the Internet bubble period in 2000. Domestic "two deposits" accelerate the pace of IPOs Recently, domestic industry investors who have had contact with Korean storage manufacturers said 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. (