SK Hynix Rally Continues as Shares Start Year Strong

SK Hynix shares(000660.KO) have started 2026 with significant momentum, as bullish sentiment has rolled over from 2025. The stock has recorded a 13.19% gain year-to-date and a substantial 33.21% increase over the past month, reflecting strong investor confidence in the memory chipmaker.

The positive price action is rooted in a combination of factors, including bullish analyst upgrades, capacity expansion initiatives, and technological advancements aimed at meeting the surging demand for advanced memory solutions, particularly in the AI sector. Recent analyst reports have further solidified this positive outlook.

Morgan Stanley recently increased its price target for SK Hynix to KRW840,000 from KRW730,000, reiterating an ‘Overweight' rating. This revision is underpinned by anticipated DRAM and NAND price increases of 62% and 75% in 2026, respectively, driven by strong demand, including a notable surge from China's H200 demand.

The firm's earnings per share forecasts for 2026 and 2027 have been raised by 56% and 63%, respectively. UBS also raised its price target to KRW434,000 from KRW394,000, citing stronger memory pricing and prolonged undersupply conditions, projecting DDR contract pricing to rise by 5% quarter-over-quarter in Q4 2025. UBS increased its 2026 operating profit forecast for SK Hynix by 11% to KRW61 trillion, a figure 25% above current consensus estimates.

Aggressive Capacity Expansion

To address the escalating demand, SK Hynix is aggressively expanding its production capacity. The company plans to commence trial operations of its M15X fabrication facility in Cheongju in May 2026. This facility will focus on producing advanced HBM3E and HBM4 memory chips, with full mass production expected by November 2026.

Upon reaching full operation around mid-2027, M15X is projected to produce approximately 50,000 12-inch DRAM wafers monthly. Furthermore, reports indicate that SK Hynix aims to double its DRAM wafer input to approximately 600,000 units per month by the second half of 2026, aligning its capacity with that of Samsung.

This expansion is driven by soaring demand from projects like OpenAI's Stargate, which could consume a significant portion of global DRAM output.

Technological Leadership

SK Hynix is also investing in cutting-edge technology to enhance its manufacturing capabilities. In collaboration with ASML, the company has assembled the industry's first commercial High-NA EUV lithography system at its M16 fabrication plant in Icheon, South Korea.

This system offers up to 8nm resolution, significantly improving semiconductor manufacturing and solidifying SK Hynix's position in AI memory solutions.

Competitive Landscape

While SK Hynix enjoys a strong position, the competitive landscape is also evolving.

Samsung Electronics plans to resume construction of its P5 Pyeongtaek fab, with initial production output expected in 2028. Micron Technology has also announced plans for a second leading-edge memory manufacturing fab in Idaho, set to begin construction in 2026 and become operational by the end of 2028.

Wells Fargo analysts note increasing discussion around accelerated DRAM fab capacity expansion plans across the industry, though they anticipate meaningful output to be a story for late-first half to mid-2027. They also highlight SK Hynix's confirmed plans for a new HBM advanced packaging and test facility in Cheongju, while maintaining that the current DRAM supply-less-than-demand dynamic will remain through 2026 and potentially into the second half of 2027.