SK Hynix overtakes Samsung as South Korea's most valuable listed company

In the wake of the AI boom, demand for high-performance memory chips has virtually exploded. SK Hynix, which says it is the world's largest provider of HBM (High Bandwidth Memory) chips, has benefited from having invested early in the development of so-called HBM chips. These chips can store and retrieve data particularly quickly and are specifically tailored to the AI processors with which they are combined.

HBM chips as a key technology for AI

The company, headquartered in the South Korean city of Icheon, is regarded as the most important supplier of HBM chips to the US market leader Nvidia. HBM memory stacks offer significantly higher bandwidth than other memory designs, which primarily benefits modern GPUs used in AI applications. Around 61 percent of the global market for these high-performance chips is held by SK Hynix, while Samsung holds around 17 percent and the US competitor Micron around 21 percent.

SK Hynix's rise was by no means predetermined. In the 2000s, SK Hynix was on the verge of bankruptcy due to its high debt levels. The company, then still operating under the name Hyundai Electronics, had gotten into a severe crisis through an aggressive expansion strategy and in 2002 was on the verge of a takeover by Micron. The share price subsequently fell at times to just 135 won (€0.08). The South Korean state supported the company for several years before SK Telecom took it over.

From near-collapse to stock market star

The turnaround came with a consistent focus on high-performance memory for applications related to artificial intelligence. After the last industry downturn in 2023, in which SK Hynix still posted an annual loss of around €4.4 billion, a record result followed: thanks to massive investments by technology groups such as Microsoft and Google in data centers for AI, the company achieved a record profit of €13.36 billion in the following year. In the most recent quarter alone, roughly five times as much profit was generated as in the same period of the previous year, with revenue of around €30 billion.

This development was clearly reflected on the stock market: the SK Hynix share has risen by more than 300 percent since the beginning of the year. On Monday, the price in Seoul climbed at times by up to 6.5 percent to a record high of 2.945 million won. This corresponds to a market capitalization of 2,082.5 trillion won – approximately €1.184 trillion.

Samsung and the dispute over valuation

Samsung Electronics had led the ranking of South Korea's most valuable companies unchallenged since the turn of the millennium. In contrast to SK Hynix, Samsung manufactures not only memory chips but also SoCs, consumer electronics, and numerous other products. Samsung pointed out that, when including preferred shares, the company still has a higher total value than SK Hynix. Preferred shares are corporate shares without voting rights that offer a fixed dividend.

The shift at the top also affects the benchmark index KOSPI: Samsung Electronics and SK Hynix together account for almost half of the weighting in the South Korean benchmark index. Samsung Electronics and SK Hynix together make up almost half of the weighting in the South Korean benchmark index KOSPI, as Reuters reported. Even smaller shifts in the market capitalizations of the two groups therefore have noticeable effects on the development of the overall market.

Experts see SK Hynix's decision to commit early to HBM memory as the key to its current success. The chairman of the board of the SK Group, Chey Tae-won, explained the changed market logic in a book: "Früher spielte es keine Rolle, ob der Speicher von Hynix, Samsung oder Micron stammte. HBM ist anders. Wenn der HBM von SK Hynix durch ein anderes Produkt ersetzt wird, funktioniert das KI-System möglicherweise nicht mehr richtig. Was früher eine Randkomponente war, ist mittlerweile zu einem integralen Bestandteil geworden."

Technical ties to Nvidia and other customers

This close technical integration makes it difficult for customers to switch memory suppliers at short notice – a structural advantage that currently benefits SK Hynix. Due to the rapidly rising demand, prices for both HBM chips and conventional memory chips have multiplied in recent months.

Given its strong market position, SK Hynix plans, according to its own statements, to significantly expand its production in the coming years. The company announced that it would double its production capacity over the next five years, and triple it in the medium term. SK Hynix is also sticking to plans to go public in the USA in 2026. At the US competitor Micron, market capitalization most recently stood at around US$1.116 trillion.

Risks and outlook

The change at the top is, however, only a snapshot, as emphasized in the reporting by the Austria Press Agency (APA). Should the current excitement surrounding artificial intelligence subside and prove to be a bubble, the ranking could quickly shift again. SK Hynix's success is closely tied to the continuation of the AI boom – and thus to investments by large technology companies in corresponding data centers and applications.

Despite these risks, the development underscores the profound change that the AI boom has triggered in the global semiconductor industry. A manufacturer that stood on the brink of collapse some 20 years ago is now the most valuable listed company in its country – and ahead of a competitor long regarded as the epitome of South Korean technological success.