They beat by KRW 2.5 trillion and immediately raised capex. The street thinks it is a cycle. Management says it is structural.
Thesis: SK Hynix is leveraging HBM dominance to starve the commodity DRAM market. This creates an accidental pricing floor for legacy bits. The street ignores the margin expansion from HBM3E yields reaching parity with HBM3 faster than expected. This is a structural capture of the AI training and inference value chain.
Verdict: LONG — Conviction: HIGH
Catalyst: 12-layer HBM3E qualification in Q3 2024.
Key Risk: Samsung HBM3E qualification timing. If Samsung hits volume in 2H24, the current pricing premium evaporates.
The Tell: Management admitted that if packaging height configurations are relaxed, the adoption of hybrid bonding will be pushed back. This reveals they were struggling with the complexity of hybrid bonding and are relieved to continue with the proven MR-MUF process for 16-stack products.
Friction Level: MODERATE_FRICTION — The sustainability of NAND profitability. The bear side calls it an accounting trick from KRW 900B in inventory reversals. Management claims a structural shift to high-density eSSDs for AI inference.
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