SK Hynix Briefly Overtakes Samsung as South Korea's Most Valuable Firm

The turnaround is particularly striking given SK Hynix was near collapse in 2002, when a debt-laden Hynix Semiconductor nearly sold itself to Micron. As reported by Reuters, its shares plunged as low as 135 won in 2003, leaving it viewed as a penny stock, or 'Dongjeon-ju' in Korean. The company's dramatic recovery is attributed to Korean retail investors rotating aggressively into chip stocks this year, with SK Hynix shares up roughly 340% year-to-date compared to Samsung's gain of around 200%. According to Kim Sunwoo, senior analyst at Meritz Securities via Reuters, 'The emergence of customised AI memory fundamentally changed the industry's economics and allowed SK Hynix to establish itself as the market leader'. The stellar rally also marks a major reversal for the memory chip maker which, only two decades ago, was on the verge of bankruptcy and was seeking potential takeover offers.

SK Hynix's rise to become South Korea's most valuable listed company marks the culmination of a long-term strategy centred on high-bandwidth memory (HBM) chips, a niche technology that has become indispensable in the artificial intelligence boom. The company's journey began in 2012 when SK Group acquired Hynix Semiconductor in a deal that drew scepticism because Samsung was then worth more than 10 times SK Hynix and dominated the global DRAM market. Seeking to differentiate itself, SK Hynix focused on developing HBM chips, a specialised type of memory capable of transferring data at significantly higher speeds than conventional DRAM. Although the company introduced the world's first HBM product in partnership with AMD in 2014, it struggled with the second generation of the technology and briefly considered abandoning the project. Instead, SK Hynix intensified its investment in HBM technology, revamping production capabilities and expanding manufacturing capacity in anticipation of future demand from Nvidia. As Shim Dae-yong, who led HBM development at SK Hynix, told Reuters, 'It was a headache back in 2019. It was obsolete.'

SK Hynix benefits from its near-total focus on memory chips, particularly high-bandwidth memory (HBM) used in AI systems, contrasting with Samsung's diversified business across logic chips and consumer electronics. The turning point came in late 2022 when OpenAI's ChatGPT triggered a global AI investment boom, with demand for HBM chips surging as Nvidia's AI accelerators became the preferred hardware for training and running artificial intelligence models. SK Hynix became Nvidia's biggest HBM supplier, with Shim noting that 'No one expected the HBM market would post such explosive growth, but we were ready in terms of performance and capacity'. SK Hynix is among the only major producers of high-bandwidth memory used in advanced AI processors, along with rivals Samsung and Micron. The company recently said it had supplied samples of advanced HBM4 memory to its biggest customers, reinforcing its leadership position in the critical AI memory segment. AI has reshaped the global semiconductor industry, elevating specialised memory chips from commonly traded commodities into critical components of the infrastructure powering applications such as ChatGPT and advanced AI models.

The milestone marks how completely the AI build-out has reordered the Korean market, with SK Hynix and Samsung between them now accounting for roughly half of the KOSPI's entire value. SK Hynix's fortunes tracked the global memory industry's traditional boom-and-bust cycle, with a severe downturn in 2023 pushing it to report an annual operating loss of ₹7.73 trillion won. However, it started recovering a year later as the AI boom gathered momentum, pushing it to report an annual operating profit of ₹23.5 trillion won in 2024, a record at the time. SK Hynix joined rivals Samsung Electronics and Micron Technology in topping $1 trillion in market value for the first time in May, driven by the AI rally. South Korean chipmakers have posted record profits, benefiting from the rush to build AI data centres by U.S. tech giants that have boosted demand for memory chips, constrained supply and driven up prices. However, if SK Hynix keeps the crown is, in the end, a question about how long the appetite for AI memory holds. The concentration creates both opportunities, lifting the index to records on Wednesday, and risks, as a single soft quarter in memory demand can take the whole market down with it.

SK Hynix's success has boosted South Korea's stock market and economy, with the company announcing plans to raise up to ₹3.7 lakh crore (USD 29.43 billion) through the listing of American depositary receipts in July to expand production capacity and widen its investor base. According to Reuters, the company's shares have surged more than 340% this year, reflecting investor optimism over sustained AI-driven demand for advanced memory chips. Although Samsung regained the top spot by market value after its shares rallied on reports of possible share buybacks, Reuters noted that SK Hynix's rise underscores how the AI boom has reshaped the global semiconductor industry and upended long-held market leadership. No one would ever have imagined that SK Hynix would overtake Samsung, said Shin Jae-yong, a business administration professor at Seoul National University, as quoted by Reuters. It is almost impossible for a runner-up to catch up with the market leader in this capital-intensive industry, which requires massive investment. HBM was the powerful driver behind how they turned the tables.