SK hynix is the most interesting company most private investors have never thought about. The South Korean company is now the global market leader in DRAM and High Bandwidth Memory (HBM), the memory chip without which no AI chip in the world functions. Nvidia is a customer. In 2025, SK hynix surpassed the entire Samsung group in operating profit for the first time: 47 trillion won against 44 trillion won, with just one third of the revenue. That's not a minor detail. That's a leadership change in one of the most important industries in the world.

My thesis: SK hynix remains attractively valued despite the enormous rally of recent months and is structurally positioned to benefit from a megatrend that is far from over. I consider the stock a buy with a defined time horizon and a clear exit plan.

The company does one thing: memory chips. No smartphone business, no home appliances, no foundry operations. For a long time, that focus was a weakness, in a cyclical commodity market without pricing power and in fierce competition with rival Samsung Electronics. That has changed. SK hynix has secured pole position in the most important growth segment: High Bandwidth Memory is the key component for AI accelerators. Three manufacturers worldwide can produce it at scale. SK hynix holds around 60% market share.

Add the NAND business. In enterprise SSDs for data centers, SK hynix posted record revenues in 2025. That's no coincidence: as AI workloads shift from training to inference, demand for fast, efficient data storage rises structurally.

The valuation barely reflects any of this. The price-to-earnings ratio sits at around 11, slightly below the historical average. The price-to-cash-flow ratio is at 10. For a company with this market position and these growth rates, that is low.

My thesis plays out if three things happen: AI infrastructure investment from the major tech companies stays at a high level and keeps HBM demand stable. The energy situation in South Korea, briefly critical after the Iran war, normalizes for good. And a potential US listing via ADRs brings in a new investor base. Chairman Chey Tae-won confirmed that option on the sidelines of the NVIDIA GTC conference on March 17, 2026. I expect a potential re-rating toward US peers in the AI tech sector as a result, another piece of the puzzle for anyone looking to benefit from the AI revolution.

The biggest risk is what always catches this industry eventually: the cycle. DRAM and NAND are traded largely like commodities. When demand weakens and capacity overshoots, prices collapse, fast and hard. SK hynix lived through that in 2023. I consider this risk real and structurally intact. My inclination is that HBM dampens the swings, but doesn't eliminate them.

I think of SK hynix as an investment with an expiration date. Anyone entering needs to be willing to watch actively and sell when the signals of a cycle peak start to accumulate. This is not a buy-and-hold stock.

One practical note: SK hynix is not listed on US exchanges, and trading on the Korean stock exchange is barely accessible for most private investors. On German exchanges, however, there is a GDR (Global Depositary Receipt) denominated in euros, which makes the stock easily tradable, for example via Interactive Brokers under the symbol HY9H. The currency risk is real, but unavoidable when investing in a Korean company.

Disclaimer: This newsletter is for informational purposes only and does not constitute investment advice. I am not a financial advisor. Always do your own research before making any investment decision.

Disclosure: I may hold direct or indirect positions (including options) in any securities mentioned in this newsletter. My opinions are my own and always honest.

/