South Korea’s KOSPI experienced a notable surge, approaching near two-year highs, driven largely by chipmaker SK Hynix and the escalating enthusiasm surrounding artificial intelligence (AI). The KOSPI index rose by 1.1%, outperforming its Asian counterparts, with SK Hynix contributing significantly to the positive momentum.
SK Hynix, the second-largest stock on the KOSPI by market capitalization, marked a 2.3% gain and remained close to its record high. The company’s Vice President, Hoyoung Son, fueled the latest uptick by outlining plans for SK Hynix to become a “total AI memory provider.” The company is distinguished as one of the few global memory chip manufacturers producing high bandwidth memory (HBM) chips, essential for high-speed computing requirements in generative artificial intelligence (GenAI) programs.
The increasing demand for AI, particularly as GenAI gains popularity, positions SK Hynix favorably. Recent reports indicated that the company had sold out its entire HBM production quota for 2024, anticipating robust growth in the coming year. While facing heightened competition from industry peers like Samsung Electronics and Micron Technology in the memory chip sector, SK Hynix has maintained a lead by expanding its production capacity for advanced-grade HBMs.
The positive sentiment towards AI-driven demand received a boost with NVIDIA Corporation’s recent earnings and guidance surpassing expectations, contributing to an overall upswing in AI-related valuations. SK Hynix’s forward price-to-earnings ratio stands at 14.84, indicating potential for further price gains in the coming months, especially if AI demand contributes to stronger earnings performance.