At the JPMorgan Korea Conference, SK Hynix: The upcycle in memory is expected to last longer than anticipated.

At the JPMorgan Korea Conference, SK Hynix: The upcycle in memory is expected to last longer than anticipated.

According to Wind Trader, JPMorgan released a research report on March 8, 2026, detailing key statements from SK Hynix’s management at the JPMorgan Korea Conference. JPMorgan maintains an "overweight" rating on SK Hynix, with a target price of 1.25 million KRW, implying about 35% upside from the current stock price (926,000 KRW).

For investors, the conference conveyed the following key signals:

The memory upcycle will last longer than market expectations, with severe supply-demand shortages for both DRAM and NAND;The HBM business maintains a strong leadership position, the mass production timeline for HBM4 remains unchanged, and profitability targets are consistent with last year;Leading manufacturers are shifting strategic focus to "fab first", with approximately 22 trillion KRW in infrastructure capital expenditure highlighting a long-term commitment to expansion;Increased shareholder returns, the company announced a 1 trillion KRW special dividend and treasury stock cancellation plan in January 2026, signaling optimism.

Upcycle Duration to Exceed Expectations

SK Hynix management systematically explained multiple driving factors for the extended memory upcycle at the conference:

  1. Rise of customized memory solutions: Products like HBM (High Bandwidth Memory) are reshaping the memory market landscape;
  2. Wafer and supply economics changes driven by HBM: Because of the "wafer-to-die penalty," HBM consumes a larger proportion of capacity;
  3. AI inference demand expands to traditional DRAM/NAND: The expansion of AI application scenarios is shifting memory demand from high-end HBM to conventional DRAM and NAND.

From a supply-demand perspective, management clearly stated that both DRAM and NAND are facing serious shortages, and price increases are expected to persist into the foreseeable future. Currently, suppliers and channel customers’ inventories are below average levels, and bit shipment growth basically matches bit production growth.

Investors Highly Focused on Long-Term Agreements (LTA) and Cycle Sustainability

At this conference, investors showed strong interest in long-term supply agreements (LTA) and cycle sustainability. Management characterized the current memory industry as a business model transformation and maintaining the upcycle as a top strategic priority.

Regarding LTA frameworks, management emphasized:

  • More binding bilateral agreements are essential for revenue and cash flow visibility;
  • Key factors include locking in supply volumes and price ranges, ensuring contract predictability;
  • LTAs are usually multi-year agreements (over three years);
  • JPMorgan believes SK Hynix is adopting a more balanced LTA strategy, seeking equilibrium between B2B and B2C customer structures, while maintaining a relatively conservative pricing approach.

HBM Leadership Steadfast, More Aggressive Capital Returns

SK Hynix reiterated its overall HBM business plan for this year; the HBM4 mass production ramp-up timeline remains unchanged (JPMorgan expects HBM4 bit shipment crossover in Q3 2026).

The company shows strong confidence in maintaining HBM business leadership, relying on: deep collaboration with ecosystem partners, including working with a leading wafer foundry on logic chip design and manufacturing; clear visibility in the technology roadmap.

On pricing, SK Hynix reaffirmed that HBM bit shipment volumes and prices are negotiated annually, aiming to maintain profitability near last year’s levels. Despite a sharp rebound in D5/LPD5 prices since Q4 2025, the company believes there is almost no possibility for contract re-negotiations for 2026 volumes.

Additionally, SK Hynix demonstrated a more proactive stance on shareholder returns. Having established the goal of achieving a net cash position first, the company maintains flexibility to distribute extra capital returns to shareholders in advance. This sends a strong positive signal—management is confident about the strength and duration of this memory cycle, with clearer cash flow visibility than in previous cycles.

DRAM Capacity Planning: Fab-First Strategy, Yong-in Site Phased Rollout

SK Hynix further revealed the strategic rationale behind its 22 trillion KRW infrastructure capital expenditure plan, centered on a "fab first" strategy.

Detailed plans are as follows:

  • Phase 1 mass production schedule at Yong-in (Yong-in) Factory No. 1 is advanced by three months, with a focus on infrastructure construction and cleanroom facilities to ensure capacity expansion flexibility;
  • The remaining Phases 2 to 6 of Yong-in Factory No. 1 will be gradually completed between 2028 and 2030;
  • Management discloses that Yong-in factory’s planned capacity is higher than the previously estimated 270,000 to 350,000 wafers/month (WSPM) range by JPMorgan, though actual construction scale may vary depending on memory building design and the 1dnm process deployment schedule.

 

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