(Bloomberg) -- SK Hynix Inc. shares surged the most in six months after the company announced volume production of a new AI chip and rival memory maker Micron Technology Inc. offered a better-than-expected forecast for the current quarter.
The Korean firm’s stock climbed as much as 9.4% in Seoul on Thursday, amid a wave of optimism about artificial intelligence chip demand that also pushed equipment providers like Disco Corp. and Tokyo Electron Ltd. up more than 7% in Tokyo. SK Hynix supplier Hanmi Semiconductor Co.’s shares increased as much as 12% in the morning.
Micron, the largest US maker of computer memory chips, reported earlier that demand for AI gear will help fiscal first-quarter revenue reach about $8.7 billion, compared with an average analyst estimate of $8.3 billion. Its shares surged in late trading and that sentiment extended into Asian semiconductor stocks.
“Hynix shares are responding more to the bullish forecast on DRAM and HBM demand from Micron,” said Sanjeev Rana, an analyst at at CLSA Securities Korea. “The recent correction in memory stocks was just a mid-cycle correction and the outlook for demand and pricing in 2025 remains firm. Hynix being the first supplier to start mass production of HBM3E 12-Hi is expected to boost investor confidence that the company will maintain its dominant position in the HBM market even in 2025.”
Icheon-based SK Hynix on Thursday said that it has begun mass production of a 12-layer memory chip known as HBM3E, a more advanced version of the high-bandwidth memory it sells to AI pioneer Nvidia Corp. The company is bidding to stay ahead of Micron and Samsung Electronics Co., who are both competing for more of the booming HBM business.
HBM chips are paired with AI accelerators from Nvidia and its rivals as they are sold to the likes of OpenAI and Alphabet Inc.’s Google for development of artificial intelligence services. Demand is expected to keep growing with Advanced Micro Devices Inc. and other contenders looking to build competitors to Nvidia’s offerings.
What Bloomberg Intelligence Says
SK Hynix and Samsung Electronics could achieve sequential sales growth in calendar 4Q, based on Micron’s sales target of 12% sequential growth for its fiscal 1Q ending November. Micron’s target for sequential expansion of gross-profit margin by 3 percentage points suggests SK Hynix and Samsung could also expand gross margins due to healthy supply-demand of DRAM and NAND chips.
— Masahiro Wakasugi and Takumi Okano, BI analysts
--With assistance from Sangmi Cha.
(Updates with analyst comment in fourth paragraph)
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