"SK hynix Expected to Be Overtaken Next Year"... HBM Market ‘Reversal Forecast’ Jolts Retail Investors

UBS: "Samsung to Overtake SK hynix as Market Leader Next Year"

"HBM Market Share Projected at 41% and 39%, Respectively"

"AI-Driven Demand Surge: Memory Boom to Continue Until 2028"

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With the rapid proliferation of artificial intelligence (AI), the memory semiconductor industry is now entering a phase of structural growth. Against this backdrop, a global investment bank (IB) has made the bold prediction that Samsung Electronics will reclaim the number one position in the high bandwidth memory (HBM) market next year. The analysis is that as the industry transitions to the sixth-generation HBM4, Samsung Electronics will seize market leadership by leveraging its proactive mass production system and manufacturing capabilities. As the competition for dominance between the two leading domestic semiconductor giants intensifies, there is a prevailing outlook that the memory supercycle will continue through 2028.

HBM4 Transition Period... Samsung Electronics' Scenario for Reclaiming the Top Spot

In a recent report, UBS, a Swiss-based global investment bank, projected that Samsung Electronics will overtake SK hynix to lead the global HBM market next year. According to Analyst Nicolas Gaudois at UBS, although SK hynix is expected to maintain its leadership this year with a 48% share of HBM bit (by capacity) shipments, Samsung Electronics is forecast to secure a 41% share next year, narrowly surpassing SK hynix’s 39% and reclaiming the number one position.

This projection has attracted market attention as the expected timeline for the reversal has moved forward compared to UBS’s previous forecasts. While Samsung Electronics was slower than SK hynix in responding to HBM3E (fifth generation), it is regaining momentum by proactively commencing mass production of the sixth-generation HBM4. In fact, Samsung Electronics shipped the industry’s first mass-produced HBM4 product last February and has been swiftly expanding its production capacity, focusing on its production sites in Pyeongtaek, Hwaseong, and Yongin.

From 'Higher' to 'Smarter'... HBM4 as a Game Changer

Experts assess that HBM4 is more than just an evolution in memory standards—it is a “game changer” reshaping the dynamics of the semiconductor industry. While competition up to HBM3E focused on physically stacking DRAM chips higher and tighter, HBM4 revolutionizes the memory’s architectural design itself.

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HBM4 has doubled the number of input/output (I/O) channels connecting memory to the graphics processing unit (GPU) from 1,024 to 2,048. This breakthrough dramatically boosts data throughput and plays a decisive role in reducing bottlenecks in AI computational environments. This is also why Nvidia has adopted HBM4 for its next-generation AI GPU, 'Rubin'.

Furthermore, HBM4 is evolving beyond a simple memory product into an 'integrated semiconductor platform'. As the base die now performs logic functions to control data flow, the industry is expanding into a complex sector combining DRAM technology, logic semiconductor design, hybrid bonding, advanced packaging, and thermal management technologies. Experts in the industry note that, “the HBM competition is evolving from a single-product battle to one of system integration capabilities.”

Memory Supercycle Through 2028... Explosive Demand Persists

However, analysts generally agree that a leadership shift in the HBM market does not imply stagnation for SK hynix’s growth. UBS points out that the spread of 'Agentic AI'—AI that autonomously judges and operates—is dramatically driving up overall memory demand. Consequently, the global DRAM bit demand growth rate is projected to surge from 22% this year to 36% next year, while the NAND flash demand growth rate is expected to rise from 20% to 23%.

With the expansion of AI infrastructure, demand for DDR5 and LPDDR5—applied in server and PC CPUs—is increasing rapidly, and the scope of NAND flash is also broadening through increased applications such as KV cache and high-capacity eSSD storage. In particular, as new DRAM wafer production capacity converges on HBM, there is strong analysis that the supply shortage of general-purpose memory will likely continue through 2028.

SK hynix Has 61% Upside Potential... Target Price Set at 204 Dollars

Reflecting this structural growth environment, UBS has issued a 'Buy' rating for SK hynix’s American Depositary Receipt (ADR) and set a target price of 204 dollars. This suggests an upside potential of about 61% over the next 12 months.

SK hynix’s average selling price (ASP) for DRAM in the second quarter increased by only 30% compared to the previous quarter, and HBM4 shipments experienced some delays. However, the company has strengthened its mid- to long-term earnings base by signing a total of 10 long-term agreements (LTAs) with American hyperscalers and major original equipment manufacturers (OEMs). SK hynix has also raised its annual capital expenditure (CAPEX) guidance to the high end of 40 trillion won, taking a proactive approach.

Analyst Nicolas Gaudois stated, “SK hynix’s current share price reflects its historical average return on equity (ROE) of 17.7%, but this is significantly undervalued compared to UBS’s projected average ROE of 40.2% for 2027-2031,” adding, “Structurally improved free cash flow (FCF) and expanded shareholder returns are expected to be reflected in the future share price.”

This content was produced with the assistance of AI translation services.