Babyfolio
Software Engineer, AI Infrastructure Investor
SK hynix is cheaper than Micron even after the US ADR premium, while generating significantly more revenue and holding a stronger HBM position. Its only downside is being Korean, which is also Micron's only upside given geopolitical supply chains; SK hynix's organizational structure is also a risk. x.com x.com x.com x.com x.com
SK hynix's KRW 40 trillion buyback and cancellation supports the shares and likely explains why they ended flat instead of down 10%. Per @jukan05, the board approved repurchasing about 24.07 million shares, around 3.3% of the total, over roughly three months from August 20, then cancelling them all, the largest share cancellation by a Korean-listed company. It also raised its shareholder return target to at least 50% of free cash flow. x.com
Micron is the better company than SK hynix because its growth guidance and margins are stronger, though SK hynix is still a great company with further growth ahead. Micron's revenue grew 379% year over year versus SK hynix's 328%; its latest-quarter annualized GAAP P/E is about 7 versus 9 for SK hynix, or 6.5 for SK hynix after adjusting for currency and Kioxia charges. SK hynix's employee profit sharing weighs on its margins. x.com x.com x.com x.com
SK hynix remains a buying opportunity, with its US ADR premium over Korean shares now at an all-time low of 32.66%. x.com x.com
SK hynix looks like the weakest storage short because it has fallen behind. More negative news may follow beyond HBM4; its LPDDR6 is reportedly well behind Samsung's. x.com x.com
SK hynix is better owned on the Korean exchange than through its US listing. The US shares trade at a market value more than $300B above the Korean shares, a 35% premium, and the ADR adds country, compliance and exchange risks. Investors wanting US-listed memory exposure could simply combine Micron and Sandisk. x.com
Micron, Samsung Electronics and SK hynix look very cheap if their long-term agreements do not impose overly conservative price ceilings. Greater clarity on those pricing terms could send memory stocks up 30% in a single day. x.com
SK hynix was priced to perfection, and its relisting into QQQ was meant to drive it higher, but it missed its first quarter after going public, which a newly listed company can't afford to do. x.com x.com
HBM advances are creating strong, durable moats and long-term pricing power for Micron and SK hynix. x.com
SK hynix's surging earnings challenge the idea that commodity memory profits are about to vanish. The attached report says third-quarter operating profit rose more than sevenfold and its operating margin reached 80%; analysts quoted there expect the earnings climb to continue at least through next year. Micron and Samsung are named alongside SK hynix. x.com
Micron is the more compelling memory maker on hybrid bonding because it is trying to win market share while Korean rivals rest on their laurels. x.com
SK hynix earns a third to a half of its market cap each year in this upcycle, so it is hard to see how holders lose. Micron trades at 3.7x 2027 estimates at a similar market cap, but hynix has much higher DRAM share, suggesting sub-3x; its estimates look stale because Micron just reported and was updated sooner. Custom HBM differentiates it, bit scaling is harder, HBM cannibalizes DRAM, and an ADR could close the valuation gap. DRAM is a commodity, so more fabs mean more dollars. x.com x.com … Show more
