# SK hynix (SKHY) Sector: Memory semiconductors | Field | Value | |---|---| | Price | $134.38 | | Intrinsic value source | Analysts | | Data as of | 2026-11-10 | | Next earnings | 2027-01-27 (estimate) | Analysts: Very bullish Picks: Top pick Discount category: Below intrinsic value ## In short The market prices SK hynix for a memory cycle that has peaked, and high margins in 2027 under its long-term agreements, with HBM4 as the main product, can close the gap. ## Themes and gap - Themes: AI supplier (ai-supplier), China and geopolitics (china-geopolitics) - Gap type: Can close (closable) - Why: The Q4 2026 report, expected in late January 2027, and the 2027 prices under the long-term agreements show whether memory profits hold as new capacity comes. ## About SK hynix is a Korean maker of memory chips. It makes DRAM, which includes high bandwidth memory (HBM) for AI accelerators, and NAND flash memory and solid state drives, partly through its US subsidiary Solidigm. It has fabs in Icheon and Cheongju in Korea and in Wuxi and Dalian in China, and it builds new fabs in Yongin, Korea and an HBM packaging plant in Indiana, USA. In the first quarter of 2026, it was the largest HBM supplier with 56.4% of HBM revenue and the second largest DRAM supplier, according to IDC as quoted in its prospectus. In Q3 2026, revenue was 104.6 trillion won and operating profit was 83.3 trillion won. One customer gave 23.9% of 2025 revenue. Its common shares trade on the KRX KOSPI Market. Since July 2026, American depositary shares (ADSs) trade on Nasdaq, and each ADS is one-tenth of a common share. SK square holds about 20% of the shares. All amounts are in Korean won unless stated. ## Thesis The market prices SK hynix as a memory maker at the top of a cycle. Memory prices and profits have always fallen after periods of short supply, and investors doubt that the AI demand for HBM and server memory can keep prices high when SK hynix, Samsung and Micron add capacity. SK hynix itself approved large new fabs in 2026: 35.2 trillion won for Yongin fab 2, 19.1 trillion won for M17 in Cheongju and 7.1 trillion won for the P&T7 packaging plant, and it expects investment to increase significantly in 2027. Investors also apply a discount to Korean companies with a controlling group shareholder. For the gap to close, four things must be true. Operating margins must stay high in 2027, near the 80% of Q3 2026. HBM4 must become the main HBM product from Q4 2026, as the company expects, and keep its share of HBM revenue. The long-term agreements with 14 customers, which cover more than half of the 2027 and 2028 capacity, must hold their prices within the agreed ranges. The company must keep its plan to return more than 50% of free cash flow to shareholders, with about 100 trillion won of returns for 2026. The Q4 2026 report, expected in late January 2027, is the next test. If prices hold through 2027, the gap can close over the next four to six quarters. If memory prices fall as supply grows, earnings can drop fast, and the discount can stay. ## Checkpoints - Jan 27, 2027 (estimate): Q4 2026 results: HBM4 and margins. Status: Pending. Watch: HBM4 above HBM3E in shipments and revenue and an operating margin near the 80% of Q3 2026 pass; a clear fall in margin or memory prices fails. - Jan 28, 2027: Buyback of about 20 trillion won ends. Status: Pending. Watch: A completed buyback, with the shares for shareholder returns cancelled, passes; a buyback that stops early fails. - 2027 (estimate): 2027 prices under long-term agreements. Status: Pending. Watch: Prices within the agreed ranges and higher 2027 profit than 2026 pass; price cuts or customers that buy less than agreed fail. ## Balance sheet - Cash: ₩114,500.0B - Debt: ₩15,800.0B - Net cash: ₩98,700.0B SK hynix has more cash than debt. At September 30, 2026, cash and cash equivalents were 114.5 trillion won, up 26.5 trillion won from June 30, 2026, and borrowings were 15.8 trillion won, down 2.8 trillion won, so net cash was 98.7 trillion won (Q3 2026 earnings release). The figures are preliminary and the audit is not complete. The cash includes the 39.9 trillion won from the July 2026 US offering and gains from the Kioxia investment. Uses of cash after September 30, 2026 include the Q3 dividend of about 14.1 trillion won (record date November 30, 2026), the new buyback of about 20 trillion won to January 28, 2027, and the large fab investments in Yongin, Cheongju and Indiana. The 40 trillion won buyback ended on October 21, 2026. As of 2026-09-30. Sources: - https://www.prnewswire.com/news-releases/sk-hynix-announces-3q26-financial-results-302921407.html - https://www.sec.gov/Archives/edgar/data/2120882/000119312526434994/d162547d6k.htm - https://www.sec.gov/Archives/edgar/data/2120882/000119312526435015/d236994d6k.htm - https://www.sec.gov/Archives/edgar/data/2120882/000119312526435019/d165312d6k.htm ## Dividends SK hynix does not pay a dividend. Source: company filings and market data, read on 2026-11-09. ## Recent events - 2026-10-29: SK hynix said that its US subsidiary Solidigm reviews ways to add production capacity, after a Korean newspaper reported a plan of about 60 trillion won for a new NAND fab in the United States. The company said that it has decided nothing yet. - 2026-10-28: SK hynix reported preliminary Q3 2026 results. Revenue rose 32% from Q2 to a record 104.6 trillion won, and operating profit rose 38% to 83.3 trillion won, an 80% margin. Net profit was 39.8 trillion won, down from 93.9 trillion won in Q2, because profit before tax was only 50.7 trillion won. Server DDR5 sales grew, and HBM4 shipments started in volume. The company said that it signed long-term agreements with 14 major customers for more than 50% of its 2027 and 2028 production capacity. Net cash rose to 98.7 trillion won. - 2026-10-28: SK hynix set shareholder returns of about 100 trillion won for 2026: cash dividends of 30 trillion won or more and buybacks and cancellations of 60 trillion won or more. The board declared a Q3 dividend of 20,000 won per share, half of it a special dividend from gains on the Kioxia investment. It approved a new buyback of about 20 trillion won to January 28, 2027, of which about 10 trillion won is for cancellation and about 10 trillion won for employee pay. - 2026-10-26: SK hynix completed the buyback of 40 trillion won that it announced in August 2026. It bought 23,693,272 shares at an average of 1,688,426 won and planned to cancel them on November 5, 2026. - 2026-10-23: SK hynix said that Solidigm stopped its review of a pre-IPO capital raise and an IPO. - 2026-08-19: SK hynix said that it plans to return more than 50% of its cumulative free cash flow from 2025 to 2027 to shareholders. It said that it considers its share price undervalued and approved a buyback and cancellation of about 40 trillion won. - 2026-08-07: The board approved 35.2 trillion won for phases 1 to 6 of fab 2 at the Yongin Semiconductor Cluster, to October 2031, and 19.1 trillion won for the M17 fab in Cheongju, to April 2031. - 2026-07-29: SK hynix reported preliminary Q2 2026 results. Revenue was 79.3 trillion won, up 51% from Q1, and operating profit was 60.5 trillion won. Net profit was 93.9 trillion won. - 2026-07-22: SK hynix raised the investment in its P&T7 advanced packaging plant in Cheongju to 7.09 trillion won, to build HBM capacity faster. - 2026-07-14: SK hynix closed its US offering of 177,900,000 ADSs at $149.00 per ADS, for $26.5 billion. It issued 17,790,000 new common shares to the depositary for 39.9 trillion won. The ADSs trade on Nasdaq under the symbol SKHY. - 2025-12-31: The US Bureau of Industry and Security ended the Validated End-User status of SK hynix's fabs in China. In December 2025, it gave SK hynix an annual license for 2026 to ship approved US equipment to these fabs. ## Risks - High: Memory prices move in cycles. When SK hynix, Samsung, Micron and Chinese makers add capacity, prices can fall fast and cut profits. Q3 2026 margins of 80% are far above past levels, and the company expects investment to increase significantly in 2027. - Medium: The ADS can trade at a price different from the KRX share. The deposit agreement limits how many shares can be held as ADSs, so investors cannot always turn KRX shares into new ADSs. On November 6, 2026, one ADS closed at about 1.5 times the value of one-tenth of a KRX share at the market exchange rate (company filings and market data). This difference can shrink. - Medium: A few AI chip customers buy most HBM. One customer gave 23.9% of revenue in 2025. If a large customer buys more HBM from Samsung or Micron, or slows its AI spending, sales and prices can fall. - Medium: Large fab projects can add too much capacity. The board approved more than 60 trillion won for Yongin fab 2, M17 and P&T7 in July and August 2026, and Solidigm reviews a new fab in the United States. - Low: SK hynix has fabs in Wuxi and Dalian, China. Since its Validated End-User status ended on December 31, 2025, it needs a yearly US license to ship US equipment to them. The won exchange rate also changes the value of the ADS in US dollars. ## Links - Page: https://picks.utilarium.app/company/SKHY/ - History of changes: https://picks.utilarium.app/company/SKHY/history/ - JSON with full history: https://picks.utilarium.app/data/company/SKHY.json > Picks is a personal record of stock picks. It gives general opinions about stocks, including a "Top pick" label. They are not tailored to your needs, goals or risk tolerance. Kevin is not a registered adviser and relies on the general-advice exemption in Canadian securities law (NI 31-103 s.8.25). Do your own research, or ask a registered adviser. Kevin may hold any stock on this site. Prices, intrinsic values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.