SEOUL – SK Hynix, South Korea’s semiconductor giant, anticipates its market value to reach 200 trillion won ($152 billion) in the next three years, doubling its current valuation of 100 trillion won. The optimistic outlook is rooted in the increasing importance of memory chips, particularly in the realm of artificial intelligence (AI), according to CEO Kwak Noh-Jung.
Speaking at the CES 2024 tech conference in Las Vegas, Kwak highlighted the growing significance of memory chips, especially as generative AI becomes more prevalent. He emphasized that as AI systems advance, the demand for diversified memory solutions rises. “If we prepare the products we are currently producing well, pay attention to maximizing investment efficiency and maintaining financial soundness, I think we can attempt to double the current market capitalization within three years,” Kwak stated.
SK Hynix has positioned itself as a frontrunner in the development of high bandwidth memory (HBM) chips, specifically HBM3, crucial in the rapidly expanding field of generative AI. The company’s innovative HBM3 chips, capable of feeding more data into AI systems, have garnered attention, with Nvidia, a leader in AI chips, becoming one of its clients.
Kwak noted that, amid competition from rivals Samsung Electronics and Micron with their HBM3E versions, SK Hynix has consolidated its internal HBM capabilities to maintain a competitive edge.
Addressing production cuts, Kwak indicated that adjustments are expected in the first quarter for dynamic random-access memory (DRAM) chips used in tech devices, signaling an increase in production. As for NAND flash chips used for data storage, SK Hynix plans to respond to market conditions after mid-year.
The semiconductor industry, including SK Hynix and Samsung, implemented extensive production cuts in response to a challenging market environment. However, signs of recovery emerged in the fourth quarter, with industry leader Samsung increasing the supply of silicon wafers, a key component in semiconductors.
SK Hynix’s positive outlook was reflected in its stock performance, trading up 1.2% in the afternoon session, resulting in a market capitalization of 100.1 trillion won, while the broader market experienced a marginal decline of 0.1%.