SK Hynix joins $1 trillion club after Samsung, Micron on AI chip boom

SK Hynix topped $1 trillion ​in market value for the first time on Wednesday, joining its memory chip rivals Samsung Electronics and Micron Technology in reaching the milestone ‌on an AI-driven rally.

Shares of SK Hynix closed the session up 9.3%, after rising as much as 14.9% during the session to take the South Korean chipmaker’s market value to a record 1,680 trillion won ($1.12 trillion) and propel the country’s benchmark KOSPI index to a record high.

Strong demand for high-end memory ​chips used in AI chipsets like those designed by Nvidia has tightened supply and driven up prices, benefiting the world’s biggest makers of the semiconductors.

Memory ​chip prices doubled in the first quarter alone from the previous period and are forecast to increase by up to 63% in ⁠the current quarter due to AI data centre demand that has constrained supplies for smartphones, laptops and automobiles and helped top memory chipmakers report record profits.

There are ​only three Asian companies that have joined the $1 trillion club, South Korea has become the first country other than the U.S. to have more than one ​company reach that market value.

HIGH VALUATION TARGETS

Led by the two chipmakers, South Korea’s KOSPI stock index gained 2.3% at 8,229.70, after rising as much as 5.1% to an all-time high of 8,457.09, with the sharp gains triggering a “sidecar” curb that temporarily halted algorithmic trading.

With Wednesday’s rally, Samsung and SK Hynix accounted for half of the index by market capitalisation. The KOSPI, which has emerged as the world’s ​best performer in a global AI boom, has risen 95% so far this year, after rising 76% last year.

“We expect memory chip demand to continue exceeding supply by 2028 ​to keep price levels high,” Kim Young-gun, an analyst at Mirae Asset Securities in Seoul, said in a report, raising target prices for SK Hynix and Samsung by 18.8% and 14.6% ‌to 3.8 ⁠million won per share and 550,000 won, respectively.