r/SKHynix

Kioxia Market Cap: $172 Billion
Full Year Revenue Guidance: $60-$65 Billion
Forward PE: Near 3x

In my opinion, Kioxia is the most undervalued company in the world right now.

Yeah I had to sneak in Kioxia’s World Record from last year. I learned so much about this company in these past few months.

AI is starting to solve all the Math & Physics Problems already but we are still at the early stages of the infrastructure buildout. Can you imagine what may happen few years from now?

Q2 Earnings and TOPIX Rebalancing will happen on the same day. I think Kioxia moved the earnings date from November 5-6 to October 30.

The company must be very excited to tell us the results. More share buybacks are expected to come. I am not selling at this historic moment and price action. Not a financial advice.

Surging memory demand driven by expanded investment in artificial intelligence (AI) data centers, combined with a persistent supply shortage, is fueling the strong results. Analysts and industry sources expect both companies to sustain record-level growth in the second half of the year as they increase the revenue share from sixth-generation high-bandwidth memory (HBM4).

According to Wise Report on Sept. 28, Samsung Electronics’ estimated operating profit for the third quarter stands at 111.38 trillion won, representing a sharp year-on-year increase of 815.47%. It would be the first time a South Korean company has posted quarterly operating profit of more than 100 trillion won. Revenue is also expected to grow 137.93% to 204.76 trillion won, surpassing the all-time record set in the second quarter. SK hynix is likewise forecast to post revenue of 99.54 trillion won and operating profit of 78.13 trillion won, representing steep year-on-year growth of 307.13% and 586.34%, respectively.

The strong results are underpinned by a structural supply shortage in memory semiconductors and the resulting price increases. Market research firm TrendForce projected that general-purpose DRAM prices would rise by up to 18% quarter-on-quarter in the third quarter of this year, while NAND flash prices would climb by as much as 15%. Intel CEO Lip-Bu Tan recently warned at an AI Infrastructure Summit that “as AI adoption continues to drive memory demand higher, supply shortages and price spikes will intensify further next year.”

Experts are also broadly optimistic about the long-term strength of the semiconductor sector. Baek Gil-hyeon, a research analyst at Yuanta Securities Korea, projected that even if the pace of memory price increases moderates somewhat, tight supply-demand conditions will persist through 2027 to 2028. He noted that supply constraints are creating a market environment favorable to manufacturers.

As Samsung Electronics and SK hynix concentrate their production capacity on HBM for AI semiconductors, the shortage of general-purpose DRAM is becoming increasingly acute. According to KB Securities, the share of HBM in Samsung Electronics’ total DRAM production capacity is expected to expand from 27% last year to 40% by 2027. Meanwhile, the share of general-purpose DRAM is projected to fall from 73% to 59% over the same period, further deepening the structural supply shortage.

Full article

SK Hynix stated on October 1 that “no specific decisions have been made” regarding reports about the potential listing of its U.S. NAND flash subsidiary Solida, adding, “The company will prioritize long-term corporate value and shareholder value enhancement as the most critical criteria for judgment.” While additional investment is necessary to support Solida’s growth, the company emphasized that external capital raising, such as an IPO, is not the only solution. SK Hynix plans to compare the pros and cons of self-funding versus external investment and choose the option most favorable to existing shareholders.

In a document titled “Explanation Regarding Recent Reports on Solida,” SK Hynix noted, “The decision to use external or internal capital will be made after comprehensively considering not only the form but also the economic value impact on existing shareholders.” The company issued the statement to address concerns over potential double listing controversies sparked by reports about Solida’s possible U.S. stock market listing.

Solida, a U.S. subsidiary established during SK Hynix’s 2021 acquisition of Intel’s NAND and SSD business for 9 billion dollars, has reportedly been considering a U.S. IPO as early as next year, with Reuters citing a potential corporate value of up to 150 billion dollars (approximately 210 trillion Korean won).

Weighing Pros and Cons of Self-Funding vs. External Investment

SK Hynix acknowledged the need for additional investment to enhance Solida’s production capacity and technological competitiveness. However, it clarified that funding does not necessarily require an IPO. The company stated, “Given our current financial capacity, we can explore various capital utilization methods, including self-funding.”

Nonetheless, SK Hynix added, “Self-funding is not always the optimal choice.” With simultaneous investments required in multiple sectors—such as HBM (high-bandwidth memory), server DRAM, and enterprise SSDs (eSSD)—the company emphasized the importance of strategic capital allocation.

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Some good news to ease the recent fears and concerns regarding their subsidiary listing which will harm SK - Full article