SK Hynix Inc. saw extreme volatility in its stock, as evidenced by a recent trading day where shares initially plunged as much as 9% before rebounding to climb over 3% in Seoul. This sharp swing highlights ongoing investor uncertainty surrounding the sustainability of the AI boom, specifically for memory chipmakers like SK Hynix. The company's two-day loss could have exceeded 20% had the early decline persisted.
Despite these market jitters, demand for high-bandwidth memory (HBM) chips, crucial for artificial intelligence models and Nvidia Corp. accelerators, is projected to outstrip supply for the next three years, according to SK Hynix Chief Financial Officer Kim Woo-hyun. The company plans "significant" capital spending increases this year and has dismissed concerns about potential oversupply. Earlier in April, SK Hynix reported a five-fold jump in quarterly profit, though investors remained cautious about the longevity of strong AI memory chip sales.
Optimism regarding AI spending plans has also benefited SK Hynix. Asian semiconductor stocks, including SK Hynix, rose following Alphabet Inc.'s announced plans to spend up to $200 billion this year on AI computing power. SK Hynix, which derives more than 7% of its sales from Alphabet, saw its shares climb as much as 6.5% in Seoul as a result of this renewed momentum. The company is actively expanding its presence, with a recent successful US offering being hailed as a "pure-play AI boom bet."
