In the past, the memory chip market was a cyclical industry that went through boom and bust cycles every few years. But in recent years, rapid growth in the generative AI market has meant that demand for new memory chips has consistently outpaced supply.
One of the major bottlenecks in the AI market is the availability of high-bandwidth memory (HBM) chips. Data center GPUs cannot effectively process AI workloads in data centers without HBM chips, which are only produced by a handful of memory chip manufacturers. These data centers also need to store their data on high-speed solid state drives (SSDs), which use NAND (flash) memory chips, rather than older platter-based hard disk drives (HDDs).
Image source: Getty Images.
This is why the actions of Micron (UM -0.66%)a major HBM chip producer, and Sandisk (SNDK -1.72%)leader in the SSD field, has skyrocketed as the AI market has grown.
Over the past three years, Micron’s stock has jumped 1,400%. Sandisk shares have soared 4,420% since its split Western digital (WDC +1.01%) on February 24, 2025. Both stocks still look surprisingly cheap relative to their forecast earnings (assuming the AI boom continues), but there’s another memory chip maker you shouldn’t ignore: SK Hynix (SKHY -0.86%).
Why does SK Hynix deserve more attention?
South Korea-based SK Hynix is the world’s second-largest producer of DRAM and NAND memory chips after Samsung. It was founded in 1983 (as Hynudai Electronics), went public in South Korea in 1996, but was not listed in the United States until after its IPO on July 10, 2026.
In the United States, SK Hynix went public at $149 per ADS. Today, its stock trades at around $170.
Today’s change
(-0.86%) $-1.47
Current price
$169.03
Key Data Points
Daily scope
$168.77 -$173.30
52 week range
$124.80 -$199.87
Volume
12.1 million
Average flight
28.5 million
Gross margin
75.63%
SK Hynix’s South Korean shares had already more than tripled year-to-date before its U.S. debut. The retail and institutional accumulation of its U.S. shares also caused it to initially trade at a higher price than its South Korean shares, which were much harder to buy.
But today, SK Hynix shares trade at just five times next year’s earnings. Micron and Sandisk trade at six and seven times forward earnings, respectively. Although SK Hynix is not growing as fast as its smaller rival Micron, it is growing much faster than Sandisk.
Revenue Growth Forecast | Current exercise | Next financial year |
|---|---|---|
SK Hynix | 254% | 54% |
Micron | 256% | 106% |
Sandisk | 143% | 19% |
Data source: Marketscreener.
SK Hynix also controls more than half of the HBM market, thanks to its early move to HBM3 chips in late 2021, and produces more than half of the current generation HBM4 chips that support NvidiaIt is (NVDA -0.52%) Leading data center GPU. This scale puts SK Hynix in a stronger position than Samsung and Micron – which typically control 25-40% and 5-20% of the HBM market, respectively – to deploy its new HBM4E and HBM5 chips to data center operators.
In the NAND market, SK Hynix is accelerating production of high-capacity QLC (Quad-Level Cell) enterprise SSDs to store huge amounts of data that AI agents can quickly access. By bundling these SSDs with its HBM chips, it can attract more customers as a “one-stop shop” for AI infrastructure upgrades and widen its gap against competitors in both markets.
Why is SK Hynix worth buying now?
SK Hynix’s scale and diversification make it a safer long-term investment than Micron, which is well diversified but remains an underdog in the DRAM, HBM, and NAND memory markets, and Sandisk, which is a pure play on NAND chips. From 2025 to 2028, analysts expect its EPS to grow at a CAGR of 107%, giving it significant upside potential if it is re-rated as a high-growth stock.
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