Memory up-cycle has just begun, analyst says

Investing.com -- The semiconductor industry is entering a powerful new uptrend, with the memory cycle still in its early stages, according to KB Securities.

Analyst Jeff Kim raised the firm’s target price on SK Hynix to KRW950,000, citing sharply upgraded operating profit forecasts tied to rising DRAM and NAND prices.

Kim said 2026 DRAM operating profit should hit “a record KRW100tn,” which he noted is “over 5x of KRW19.8bn in 2018 during [the] last super-cycle.”

KB Securities expects high-value chip shipments and pricing to accelerate on the back of expanding AI data centers.

The firm now forecasts 2026 operating profit of KRW115tn, up 154% year over year, with NAND operating profit projected to reach KRW15tn, or “+9x YoY.”

The brokerage sees multiple quarters of earnings surprises ahead. For 4Q25, KB Securities estimates SK Hynix will deliver revenue of KRW31.4tn, up 28% quarter over quarter, with operating profit of KRW17.4tn, up 53% sequentially.

Kim said the earnings surprise “should continue throughout 1H26,” with 1Q26 operating profit expected at KRW21.6tn and 2Q26 profit at KRW27.3tn.

Supply constraints will also support the cycle. Kim expects the chip shortage to persist through 2026–27 because “supply increases are likely to be limited until the opening of the Yongin semiconductor cluster expected in 1H28.”

“The memory up-cycle has just begun,” KB Securities said, noting Korean chipmakers should supply 90% of global HBM4 demand. Physical AI technologies such as humanoid robots and self-driving systems will require “significantly larger chip capacity,” reinforcing memory’s role as a strategic asset in the AI era.

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