Terry
Private Fund Portfolio Manager & Trader
Chip-equipment makers are first in line to benefit from Samsung and SK Hynix's largest-ever capacity expansion, which sent Applied Materials, KLA and ASML sharply higher. The Korean buildout is just beginning and has not reached the earnings phase, so markets trade expected demand for equipment, cleanrooms and materials first. That mirrors NVIDIA last year, when trading expectations before earnings lifted its supply chain for a full year. x.com x.comÂ
Intel joining TeraFab gives the firmest support to earnings at equipment makers such as ASML, Applied Materials, Lam Research, Tokyo Electron and KLA, whatever happens to Musk's 2nm ambitions or Intel's turnaround. Morgan's April 6 semiconductor report concludes new chipmaking entrants are clearly positive for equipment makers, and puts DRAM equipment spending at $14.4B versus $11.6B for logic. Lacking TSMC's experience, TeraFab will pile on tools to protect yields, especially lifting KLA. x.com x.comÂ
Prepaid contracts and demand-paced fabs weaken a broad 2028 memory-glut case. SK hynix says over half its 2027-28 capacity is signed with deposits; 'sold out through 2029' includes negotiations. Samsung targets 60-70% contracted capacity. Micron's three projects begin output in 2H28; tooling follows demand. Reuters says CXMT's 20-30%-yield HBM3E may ship this year to export-restricted Chinese buyers, but performs like older HBM3. Commodity DRAM risks 2028-29 oversupply; NAND could ease in 2H27. … Show more
More memory CapEx may yield proportionally fewer bits as HBM consumes more wafer capacity, supporting SK hynix and Samsung's pricing. Both reported double-digit quarterly DRAM and NAND price gains; Samsung targets 60-70% of mid- to long-term capacity under LTAs. SK hynix has the stronger execution record, but Samsung could benefit enormously from conventional memory without winning HBM4. If trends persist, normalized margins could rise, though memory remains cyclical. x.comÂ
Tight memory supply keeps the AI memory supplier trade in bill-of-materials names if it persists. The investor aleabitoreddit reports an SK hynix shortage outlook through 2030 and an operating-margin result near 80%. HBM allocation and average-selling-price guidance are the next tests; Korea has already priced the earnings print, so the next move depends on who locks capacity. x.comÂ
SK hynix stands to benefit from higher HBM prices as supply remains constrained. Needham expects HBM price increases next year and tight memory supply through 2030; SK hynix has finalized 2027 HBM prices and volumes with major customers. SK hynix also plans roughly KRW100 trillion in FY2026 shareholder returns, including at least KRW30 trillion in dividends and KRW60 trillion in share acquisitions and cancellations. x.com x.comÂ
SK hynix has unusually strong earnings visibility because it expects memory demand to exceed supply through 2030, while long-term agreements with 14 customers cover more than half of its 2027 and 2028 production capacity. Record Q3 operating profit of KRW 83.3T also beat the KRW 76.7T estimate. x.com x.comÂ
SK hynix's five-year agreements with 14 major customers cover more than half its 2027-28 capacity, giving its memory earnings unusually long visibility. DRAM prices rose 28% and NAND 25% in the quarter, while operating profit reached 62.8 billion against 58.5 billion expected; Q4 DRAM shipments are guided up 25% from Q3. Those commitments support the view that demand is not peaking yet. Overweight, $400 target. x.comÂ
SK hynix's contracted volumes make revenue more dependable than margins. LTAs cover over half of 2027-28 capacity, but not all demand through 2029 is signed, and prices still move within agreed ranges. Big customers' 2027 HBM volume and pricing are settled; HBM4 yields are ahead of plan. Server DDR5 shipments rose over 40% quarter on quarter, though most of the earnings beat came from pricing. Management expects the HBM profit premium over regular DRAM to narrow next year. x.comÂ
Samsung's HBM4 ramp makes SK hynix's ability to defend its HBM lead the key question in the memory race. Chosun Biz reports SK hynix's HBM4 shipments may have missed expectations for a second straight quarter amid Nvidia Rubin delays and chip tuning. Counterpoint puts Samsung's Q2 HBM share at 33%, up from 21%; TrendForce expects strong SK hynix Q3 profits. Samsung is the preferred memory stock right now, though there may be no single clear winner. SK hynix's October 28 report is the next check. … Show more
SK hynix's stronger pricing and contracted demand support the still-favored memory duration trade. DRAM and HBM capacity is sold out through 2029, and a supply-demand imbalance is expected through 2030. More than half of 2027-28 capacity is under long-term agreements, with agreed 2027 HBM prices significantly higher year on year. Guangfa HK expects fund flows and bearish sentiment to improve after earnings. x.comÂ
SK hynix's strong pricing and secured capacity could push memory stocks higher. Per Wall St Engine, its Q3 DRAM ASP rose by a high-20s percentage quarter over quarter, while long-term agreements cover more than half of its 2027-28 capacity. Those figures support the memory upcycle. x.comÂ
