SK Hynix has leveraged its first-mover advantage in high-bandwidth memory (HBM) to rise from a once-struggling follower to a key price-setter in the AI supply chain. This transformation occurred amid the dual forces of AI server expansion and a memory chip shortage, enabling the company to surpass traditional leaders in both profitability and capital market performance.

Recent financial results highlight this dramatic shift. According to reports, SK Hynix's fourth-quarter revenue increased by 66% year-over-year, with an operating profit margin reaching 58%—higher than that of the world's largest foundry, Taiwan Semiconductor Manufacturing. Over the past 12 months, the company’s market capitalization surged approximately 340%, reaching 640 trillion won.

Shifts in supply and demand have been central to this growth. Shortages in HBM, DRAM, and NAND have driven up prices, and as the leading HBM supplier, SK Hynix has directly benefited, rapidly expanding its profit margins. Market analysts have consequently raised their estimates of the company’s leverage within the AI cycle.

Customer relationships have also played a crucial role. SK Hynix has captured more than half of the global HBM market, serving as a primary HBM supplier to NVIDIA and recently being selected by Microsoft as a supplier for its self-developed AI chips.

Against the backdrop of SK Group Chairman Chey Tae-won's vision of AI as a "fourth quantum leap," the company plans to invest $10 billion to reposition itself from a chipmaker to an "AI solutions company." However, increasing competition, customer bargaining power, and geopolitical risks are simultaneously raising uncertainties.

Long-Term Commitment to HBM: R&D Focus and a Resilient Organizational Culture

SK Hynix’s turnaround was not instantaneous. Founded in 1983 under the Hyundai Group chaebol structure, the company survived as a creditor-controlled "zombie" enterprise following the Asian financial crisis of 1997–1998 and the DRAM oversupply in the early 2000s. In 2002, Micron proposed a $3.2 billion acquisition but declined to assume $6 billion in debt, causing the deal to collapse.

It was not until 2011 that SK Group stepped in, acquiring the company for 3.4 trillion won and ending what was referred to as the "Curse of Hynix." Chairman Chey Tae-won later appointed veteran engineer Park Sung-wook as CEO, who championed a strategy prioritizing long-term R&D over short-term financial results. Under his leadership, the company continued investing in HBM even before it gained widespread recognition.

Between 2010 and 2024, SK Hynix’s R&D spending grew at an average annual rate of 14%. As noted by author Chris Miller, it was only after ChatGPT ignited demand for AI servers that the company’s years of strategic investment finally paid off.

HBM Shortage and AI Boom Push Prices and Profit Margins Higher

HBM’s value lies in its ability to provide high-speed data throughput for AI training and inference, making it a critical bottleneck in AI servers. As demand surged, memory shortages began to dictate profit distribution across the industry, with SK Hynix’s high margins reflecting this structural "squeeze effect."

According to an HSBC research report, the HBM market grew from $1 billion in 2022 to $16 billion in 2024 and is projected to reach $87 billion by 2027.

Professor Kwon Seok-joon of Sunkyunkwan University suggested that memory constraints may persist until the fourth quarter of 2027, noting that "forward capacity has been pre-booked, and everyone agrees memory is the current bottleneck."

During this cycle, SK Hynix’s revenue grew from 44.6 trillion won to 97.1 trillion won over the past three years, indicating that its gains have extended from "price increases" to "market share growth."

A Key Victory Over Samsung: Securing Over Half the Market with NVIDIA and Microsoft

In the critical AI component segment of HBM, SK Hynix has outperformed more established chipmakers, including long-time rival Samsung, capturing over half of the global HBM market and becoming a primary supplier to NVIDIA. Professor Kwon remarked that SK Hynix has evolved from a "follower" to an industry "shaper."

The company’s client portfolio continues to strengthen. In addition to NVIDIA, SK Hynix was recently selected by Microsoft to supply its self-developed AI chips. Such partnerships not only ensure near-term shipments but also establish early barriers in next-generation product definition, customization capabilities, and yield requirements.

From Chips to an "AI Solutions Company": A $10 Billion Bet on the Next Phase

Even amid the HBM boom, SK Hynix is doubling down on AI. The company plans to invest $10 billion in capital expenditure to expand its focus from pure-play chip manufacturing to becoming an "AI solutions company." Chairman Chey Tae-won has stated that AI will represent SK Group’s "fourth quantum leap."

The expansion extends beyond semiconductors. Last summer, SK Group affiliates, including SK Hynix, broke ground on South Korea’s largest AI data center project in Ulsan, valued at approximately 7 trillion won. At the event, Chey Tae-won emphasized that the company aims to build the "most efficient AI infrastructure" through an integrated approach spanning "semiconductors to power and energy solutions."

A "New Admiration" and Capital Shift: SK Hynix Becomes a Top Choice for South Korea’s Youth

The company’s rising industrial stature is also reflected socially. A survey of young job seekers revealed that SK Hynix has overtaken Samsung as the most desirable employer in South Korea. Seoul National University student Lim Hee-jin described the company as having "high future potential," adding that she would "feel envious" if a friend were hired there.

For investors, this trend of "talent and capital concentrating toward AI memory" suggests that SK Hynix’s advantages are not merely cyclical but rooted in its positioning within HBM supply, customer validation, and technological evolution. The real test will be whether the company can convert its current excess profits into sustained product and ecosystem control as HBM transitions from scarcity to normalization, customer demands intensify, and competitors close in.