SK hynix, Samsung soar after US chip rally

South Korean chip stocks rose sharply in early trading on May 11.

SK hynix, a South Korea-based memory chip maker, climbing 9.3% to 1.8 million won (US$1,300) and moving above 1.8 million won (US$1,200) per share.

Samsung Electronics gained 6% to 284,500 won (US$200) and hit a record intraday high.

SK Square, a South Korea-based holding company, also rose 7.2% to 1.2 million won (US$810).

The gains followed a 5.5% rise in the Philadelphia Semiconductor Index in the previous US trading session, when Intel and Micron advanced 14% and 15.5%.

Long-term supply agreements among memory makers may support returns, said Kim Young-geon, analyst at Mirae Asset Securities.

🔗 Source: Chosun Daily

🧠 Food for thought

Implications, context, and why it matters.

AI demand is changing how memory chips get sold

These long-term agreements break from how memory has usually been sold. Dynamic Random-Access Memory (DRAM) and NAND flash memory were often made ahead of demand and then sold on the open market 1.
An AI-driven shortage has pushed some buyers to offer direct funding for SK hynix production lines and for tools like ASML’s Extreme Ultraviolet (EUV) lithography machines, used to make advanced chips 1.
Terms can strongly favor suppliers. Some contracts reportedly include upfront payments of about 10% to 30% of the deal value plus a minimum price for the full term 2.
Supply has grown so tight that fulfillment rates are at record lows and open capacity is essentially zero. Chipmakers warn shortages may last through at least 2027 1.

The memory squeeze is spreading across tech

Heavy AI demand is changing DRAM from a cyclical commodity market into one with clearer tiers, where high-performance AI memory sells at large premiums and suppliers have more leverage 3.
That pricing strength is raising profits for memory makers and changing the economics of the business 4.
To serve AI orders, manufacturers are shifting capacity toward High Bandwidth Memory (HBM), an advanced memory used in AI systems, and other AI-focused products. That move can tighten supply of standard DRAM for PCs and phones 5.
The shift can create a two-tier market. Device makers and other chip buyers without long-term deals may have to pay more for limited spot supply 2.