SEOUL, July 27 (AJP) - China's rising chip darling and IPO blockbuster CXMT may be catching up fast, while local archrival Samsung Electronics bristles at the comparison. But in the AI memory race, this year still belongs to SK hynix.
The headline numbers may no longer surprise investors when SK hynix reports second-quarter earnings on Wednesday, even though operating profit is expected to nearly double its previous quarterly record and exceed the company's entire profit for 2025.
The earnings surge has become almost predictable. Demand for high-bandwidth memory (HBM), AI-oriented DRAM and enterprise solid-state drives continued to accelerate throughout the second quarter, as reflected in the strong results reported across the AI semiconductor supply chain.
Yet SK hynix's success cannot be explained by HBM alone.
While HBM has become the defining product of the AI era, analysts say the company made a broader strategic decision that fundamentally altered the economics of the memory industry: it redirected manufacturing capacity toward AI memory rather than expanding production evenly across all products.
HBM requires substantially more wafer capacity, advanced packaging and production time than conventional DRAM. As SK hynix increasingly prioritized HBM, less production capacity remained for commodity memory.
That decision rippled across the market.
With supply of conventional DRAM tightening, prices strengthened even outside the AI segment. Instead of merely benefiting from booming HBM demand, SK hynix effectively tightened supply across the broader memory market, lifting profitability in both premium and commodity products.
According to Mirae Asset Securities, continued expansion of HBM production is expected to further constrain conventional memory supply, supporting prices across the industry.
The result has been a virtuous cycle.
Higher HBM demand has boosted margins directly, while tighter supply has improved profitability in conventional DRAM. NAND has also joined the recovery as AI data-center construction fueled demand for enterprise SSDs, allowing SK hynix's two major memory businesses to recover simultaneously.
Mirae Asset projects SK hynix's average DRAM selling price to rise 161.4 percent this year, while NAND prices are forecast to jump 222.2 percent. The brokerage expects operating margins to approach 77 percent and operating profit to continue climbing next year despite increased capital spending, supported by sustained AI infrastructure investment.
Another powerful tailwind remains hyperscale AI infrastructure.
The world's largest cloud providers continue to accelerate capital spending, reinforcing expectations that demand for premium memory will remain elevated. Mirae Asset estimates combined order backlogs among major hyperscalers reached roughly $2.1 trillion in the first quarter, with contracts scheduled for delivery within two years growing even faster than overall orders.
SK hynix's close relationship with Nvidia has further strengthened its competitive position.
The company remains the leading supplier of HBM for Nvidia's AI accelerators and last week expanded cooperation with the U.S. chip designer through joint development of next-generation HBM and AI infrastructure technologies. The move reinforced expectations for HBM4 demand as Nvidia prepares its Rubin platform.
The AI strategy has also shaped investment decisions beyond DRAM.
Earlier this month, SK hynix chose to retain its stake in Japanese NAND maker Kioxia rather than monetize the investment, signaling management's conviction that enterprise storage will become another core pillar of AI infrastructure alongside HBM.
The comparison with Samsung Electronics and CXMT therefore misses a larger story.
SK hynix did not simply build a lead in one premium product category. It made an early strategic bet that AI would redefine memory demand and reorganized its production capacity, capital spending and partnerships around that conviction. In doing so, it helped reshape pricing dynamics across the entire memory market.
Investors are therefore likely to focus less on whether SK hynix delivers another record quarter than on whether management believes the AI-driven transformation of the memory industry still has room to run.
Samsung Electronics and Micron are accelerating their next-generation HBM roadmaps, while CXMT's rapid ascent has revived concerns over Chinese competition in conventional memory. Yet analysts say the more important question is whether SK hynix can preserve the structural advantage created by its early AI strategy.
For now, the company has demonstrated that the biggest winner in AI memory is not necessarily the company selling the most HBM, but the one that understood earliest how AI would reshape the economics of the entire memory industry.
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