---
endpoint: analytics
pattern: 06 · Bull · bear synthesis
status: done
latency_ms: 133503
conversation_id: 49f0d654-a25b-4d1a-ad8b-5cee42446579
citations: 4
created: 2026-05-31 17:25:40Z
---

# One-paragraph bull and one-paragraph bear on SK Hynix, balanced.

**SK Hynix (000660 KS) — Balanced Bull / Bear**

**Bull.** SK Hynix is the structural winner of the AI memory cycle, having converted its early HBM lead with NVIDIA into a step-function in earnings power: 1Q26 revenue hit a record **KRW 52.6tn (+60% QoQ, +198% YoY)** [7], with operating profit of **KRW 37.6tn at a 72% margin** — already a higher-margin franchise than most foundry peers [8]. CLSA estimates ~**70% of Hynix's HBM supply goes to NVIDIA**, and ASIC customer interest is broadening the customer base into 2026 [2]; HBM bit shipments are modeled to rise **40% in 2026 after +95% in 2025**, taking HBM to **~50% of DRAM revenue** and stabilizing the mix at 55–60% by 2027–28, which both raises ROE and structurally lowers the historical memory-cyclicality discount [3]. The roadmap to HBM4 (mass production starting 4Q25 with a **~30% ASP premium over HBM3E**) and 1c-nm-based products (SOCAMM2 for NVIDIA Vera Rubin, LPDDR6) underpin a 2026 ASP/mix tailwind even if bit growth slows [4]; CLSA accordingly maintains its bullish view and a **₩350,000 target price** (HC O-PF), with management talking up multi-year LTAs and net cash >₩100tn as the next leg of the re-rating [1].

**Bear.** The bear case is that this is a late-cycle memory print being celebrated as a secular one. The same call flags spot DRAM prices already showing **"some signs of weakness"** and management openly conceding **demand softening in PC and mobile** due to memory-price-driven cost pressure, with the entire bull thesis now leaning on hyperscaler/server demand to offset consumer weakness [9]. CapEx is set to **"increase significantly"** YoY to fund the Yongin Cluster, M15X and EUV tooling [10] — the classic late-cycle setup where every supplier (Hynix, Samsung, Micron, plus rapidly expanding Chinese DRAM/NAND makers) is adding wafers into peak pricing, and CLSA itself flags **"ongoing inventory correction… and rapid production expansion at Chinese chipmakers"** along with US–China trade-war escalation as the principal risks [5]. Geopolitics is a live wire: the WSJ reported the US Commerce Department may revoke the indefinite VEU waivers that allow Hynix to ship US-origin memory equipment into its China fabs, which could disrupt a non-trivial slice of DRAM output and force costly Korea-side reshoring capex [6]. Add the customer concentration risk (70% of HBM into one buyer [2]), HBM4 qualification execution risk, valuation at **1.7x PB (CLSA target, +2 stdev above the 10-yr 1.2x average)** [3], and one needs to underwrite a multi-year, low-cyclicality "AI-memory utility" outcome to justify entry here rather than waiting for the inventory/ASP wobble to be priced in.

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**Sources**
[1] Korea Memory sector outlook (Micron call read across; solid AI demand) — CLSA (25 Jun 2025) — 607962817LinqAlpha.PDF
[2] Korea Memory sector outlook (Micron call read across) — CLSA (25 Jun 2025) — 607962817LinqAlpha.PDF
[3] Korea Memory sector outlook (Micron call read across) — CLSA (25 Jun 2025) — 607962817LinqAlpha.PDF
[4] SK Hynix - HC O-PF (Expecting another strong quarter) — CLSA (19 Jun 2025) — 607962387LinqAlpha.PDF
[5] SK Hynix - HC O-PF (Investment risks) — CLSA (19 Jun 2025) — 607962387LinqAlpha.PDF
[6] Korea Memory sector outlook (Potential restrictions on China fabs) — CLSA (22 Jun 2025) — 607962512LinqAlpha.PDF
[7] SK hynix Q1 2026 Earnings Call — 22-April-2026
[8] SK hynix Q1 2026 Earnings Call — 22-April-2026
[9] SK hynix Q1 2026 Earnings Call (market outlook) — 22-April-2026
[10] SK hynix Q1 2026 Earnings Call (CapEx commentary) — 22-April-2026

## Citations

- [7] **SK hynix, Inc., Q1 2026 Earnings Call, 22-April-2026 8** · external
- [8] **SK hynix, Inc., Q1 2026 Earnings Call, 22-April-2026 8** · external
- [9] **SK hynix, Inc., Q1 2026 Earnings Call, 22-April-2026 8** · external
- [10] **SK hynix, Inc., Q1 2026 Earnings Call, 22-April-2026 8** · external

