A leading global technology fund from Janus Henderson Investors has announced a significant focus on holding shares of South Korean memory chipmaker SK Hynix, betting that a tightening global supply for high-bandwidth memory chips will further boost the profitability of this key AI memory chip manufacturer.

Over the past year, SK Hynix's stock price has surged approximately 1000%, establishing it as a bellwether for AI industry investment.

Co-manager of the fund, Richard Clode, highlighted that SK Hynix commands a 57% share of the global high-bandwidth memory market, significantly ahead of competitors Samsung Electronics and Micron Technology.

This dominant market position provides a strong foundation for the company's future earnings growth.

Clode noted that most anticipate supply shortages this year could become even more severe next year, prompting major cloud service providers to sign long-term contracts with demanding pricing terms, which presents a potential profit enhancement opportunity for SK Hynix.

Data from Counterpoint Research indicates that by Q4 2025, SK Hynix's share in the high-bandwidth memory market is expected to further solidify its industry leadership.

These chips are crucial components for AI infrastructure, widely used in AI training and high-performance computing.

The Janus Henderson Global Technology Leaders Fund, with assets of approximately $8.3 billion, has outperformed 96% of its peers this year and delivered a cumulative return of 36% over the past three years.

While the fund also holds positions in Micron Technology and SanDisk, Clode expressed a preference for companies focused specifically on memory chips over conglomerates like Samsung with diverse business lines.

He stated that given these companies' exceptional profitability, their stocks appear even more reasonably priced during market upswings, making long-term holding a straightforward decision.

Compared to the Philadelphia Semiconductor Index's price-to-earnings ratio of around 27, SK Hynix and Samsung trade at about 7 times earnings, with Micron at roughly 10 times, indicating that memory chip companies still trade at a valuation discount despite high demand.

Clode pointed out that 2023 saw global chipmakers experience their worst losses in a generation, leading to significant cuts in capital expenditure and delays in new factory construction, a process that typically takes two to three years for supply to recover.

The combination of supply shortages and rapidly growing AI demand is structurally altering the cyclical nature of the memory chip industry: demand for high-end AI chips remains robust; supply tightness is driving cloud providers to secure long-term contracts; and improving margins are enhancing the relative attractiveness of stock prices.

Clode believes that proper asset allocation is more critical than stock-picking, as high-quality memory chip companies collectively benefit from improved profitability in a tight supply market.

Despite widespread attention on AI sector valuation bubbles, the structural advantages of memory chip firms provide them with long-term support.

Clode emphasized that companies focused on high-bandwidth memory, like SK Hynix, are poised for sustained profit growth under conditions of tight supply and demand backed by long-term contracts, whereas conglomerates with high exposure to other businesses may face cost pressures.

As demand for AI computing power continues to rise, the earnings outlook for SK Hynix and its peers is expected to remain strong.

For investors, the memory chip sector is presenting a unique window of opportunity characterized by low valuations and high profitability.