From the brink of bankruptcy to the peak of the industry! SK Hynix's epic comeback achieved with HBM, surpassing Samsung to become South Korea's largest market value.

On Monday, SK Hynix surpassed Samsung Electronics for the first time, becoming the highest market value publicly traded company in South Korea. Twenty years ago, SK Hynix was deeply in debt and on the verge of bankruptcy, but now it has achieved a remarkable comeback. Riding on the wave of AI, SK Hynix's stock price soared The company is a major supplier of High Bandwidth Memory (HBM) chips, which are used in AI systems for customers such as NVIDIA Corporation and Alphabet Inc. Class C, the parent company of Alphabet. SK Hynix has become one of the biggest beneficiaries of the AI boom, with its stock price surging over 340% this year, surpassing both Samsung and Micron Technology, Inc. SK Hynix rose 5.6% on Monday, reaching a market value of 208 trillion Korean won (approximately $1.35 trillion USD), making it the highest-valued storage chip manufacturer in the world. Samsung fell 0.14% on Monday, with a market value (excluding preferred stock) of 206.67 trillion Korean won. SK Hynix becomes the highest-valued storage chip manufacturer in the world Artificial intelligence has reshaped the global semiconductor industry, elevating specialized storage chips from ordinary trading commodities to essential components for advanced AI models like ChatGPT. SK Hynix focuses on producing storage chips, while Samsung also manufactures logic chips as well as consumer electronics like smartphones and TVs. Samsung has maintained a leading position in the industry since 2000. "The emergence of customized AI memory fundamentally changed the industry's economic landscape, allowing SK Hynix to establish a leading position in the market," said Kim Sunwoo, a senior analyst at Meritz Securities. Samsung stated in a release that any calculation of their market value should include preferred stock. Including preferred stock, the company's market value at the close of trading was 224.64 trillion Korean won. From near bankruptcy to industry leader SK Hynix's rise to the top market value spot is considered one of the most classic turnaround stories in South Korean corporate history. In 2002, Magnachip Semiconductor Corp, then close to being acquired by Micron, accumulated massive debt during its aggressive expansion phase. The deal fell through, leading the company to operate under the control of creditors for nearly a decade. In 2003, its stock price plummeted to 135 Korean won, becoming known as a low-priced stock in the market. For many years after, the company's performance closely followed the typical boom and bust cycles of the global storage industry. In 2023, as storage chip prices plunged, SK Hynix posted a full-year operating loss of 7.73 trillion Korean won. The following year, amid the rising tide of AI, with companies like Microsoft, Alphabet, and Meta increasing investments, SK Hynix's performance began to improve, achieving a historical high of 23.5 trillion Korean won in operating profit in 2024. Global highest-valued company Analysts believe that SK Hynix's ability to occupy a core position in the global AI industry chain is due to the company's continued investment in HBM research and development during industry downturns. These chips offer advantages of faster processing speeds and lower power consumption. Unlike traditional storage products, HBM chips are deeply integrated with AI processors, raising the industry's barriers to entry and giving manufacturers stronger pricing power. By 2025, SK Hynix holds a 61% share of the global HBM market, far ahead of Samsung's 17% and Micron's 21%. Established in 1983, SK Hynix was initially a department of the Hyundai Group, later spun off and acquired by the SK Group. The acquisition faced significant resistance at the time. SK Group Chairman Chey Taeyon outlined the original intention of the acquisition in a book published in January of this year. "We acquired Hynix with the true purpose of transforming it from an ordinary storage chip manufacturer into a mainstream semiconductor company with irreplaceable products," Chey said. "In the past, whether the memory came from Hynix, Samsung, or Micron, they were interchangeable ordinary products. But HBM is different. If SK Hynix's HBM is replaced by other products, AI systems may not function properly. HBM, once a peripheral component, has now become a core part," Chey added. Analysts state that Samsung, as the world's largest DRAM manufacturer, is facing a challenge from SK Hynix. According to Bank of America, SK Hynix's monthly output of DRAM is expected to reach around 589,000 wafers, while Samsung's output is 691,000 wafers. However, SK Hynix's DRAM output is projected to expand by 38% between 2025 and 2028, while its competitors will only grow by 17.5%. At this rate, the production capacity gap between the two companies is expected to narrow from 23% in 2025 to less than 10% by 2028. Considering Samsung's originally superior manufacturing scale, this catching up is a significant milestone. Kim from Meritz Securities said, "Previously, due to differences in production scale, competitors had no way to narrow the profit gap with Samsung." It is reported that SK Hynix plans to list on the Nasdaq, expanding its investor base and further enhancing its reputation among global investors.