South Korea's primary stock exchange operator has issued its second warning in about a month regarding SK Hynix's surging stock price, raising concerns that the shares may be overheating. The Korea Exchange issued a one-day "investment caution" for the stock on Tuesday. While this warning does not halt trading, it signals investors to exercise caution. Following the announcement, the stock fell nearly 2% in early trading.

Such warnings are typically triggered when a stock experiences sudden or unexplained significant movements in trading volume or price. SK Hynix shares rose 6.1% on Monday amid market speculation that the company was planning to issue American Depositary Receipts (ADRs). However, the company stated that no decisions had been made regarding ADRs.

As a key supplier of high-bandwidth memory (HBM) to AI chip leader Nvidia (NVDA.US), SK Hynix's stock has more than tripled this year. Notably, on November 3, the Korea Exchange issued a similar one-day "investment caution" due to the stock's sharp rally. The following day, November 4, the stock plunged 5.3% on the exchange.

Warnings from the exchange are relatively rare for large listed companies and serve as a preemptive signal before more severe restrictions, such as margin trading limits, are imposed. If a stock under an investment caution meets one of eight criteria—such as a 100% gain within three trading days—the exchange may escalate to an "investment alert." Additionally, a 40% rise in two trading days could trigger a one-day trading suspension.

**AI Boom Drives Record Q3 Profit for SK Hynix** Buoyed by soaring demand for memory chips amid global AI infrastructure expansion, SK Hynix reported third-quarter revenue of 24.5 trillion won and a record operating profit of 11.4 trillion won. The company plans to increase capital expenditures next year to ramp up production and meet unprecedented demand driven by industry leaders like OpenAI and Meta (META.US).

SK Hynix will begin supplying customers with next-generation HBM4 components this quarter, with full-scale sales expected by 2026. Executives noted during the earnings call that HBM chips have been sold out since 2023, with supply constraints likely to persist until 2027. The company emphasized that the memory market has entered a "super cycle," marked by structural shifts in demand.

Many investors and tech firms believe AI will fuel a prolonged "super cycle" for memory chips, particularly high-performance HBM used in AI accelerators and services like ChatGPT. This trend bodes well for SK Hynix, a leader in HBM production.

Analysts project significant sales and profit growth for SK Hynix by 2026, driven by demand for DRAM and NAND chips. The company forecasts DRAM bit demand to grow over 20% next year, while NAND bit demand could rise 17%-19% in 2026. Higher demand is expected to boost selling prices, further enhancing profitability.