JPMorgan said in an Aug. 9 research note that SK Hynix’s 15% share-price drop last week did not reflect a change in the company’s underlying business. The stock underperformed the KOSPI, down 5%, and Samsung Electronics, down 9%, as investors focused on three issues: uncertainty around HBM specifications and pricing, the timing of shareholder returns, and the company’s disclosed 54 trillion won infrastructure capex plan.
According to the report as summarized by TechFlowPost, JPMorgan said the memory supercycle remains intact and kept an Overweight rating on SK Hynix with a target price of 2.75 million won. The bank argued that reports of a steep HBM pricing discount were inaccurate, that an updated shareholder return plan should arrive by the end of September at the latest, and that the capex program is tied to a longer-term capacity roadmap rather than a short-term aggressive buildout.
JPMorgan disputes reports of a 50% HBM4 pricing discount
The biggest concern in the market has been HBM4 pricing. Some media reports had suggested that SK Hynix’s 2027 HBM4 pricing could come in 50% below competitors. JPMorgan said that figure was not accurate.
The bank’s own conservative assumption is for 2027 HBM average selling prices to rise by less than 40% from a year earlier. It gave three reasons. First, memory suppliers are currently more inclined to allocate long-term agreement capacity to DDR5, LPDDR5, and NAND, where margin premiums also remain attractive. Second, Nvidia is SK Hynix’s largest customer, and the two companies have a multi-year product relationship, which means pricing needs to be viewed through the lens of long-term procurement. Third, HBM prices can be renegotiated every year, leaving room for adjustments in later periods.
JPMorgan added that if SK Hynix is able to lift HBM average selling prices above the bank’s estimates, that would create upside risk to its earnings-per-share forecasts.
Shareholder return plan now expected by end-September
JPMorgan described shareholder returns as the most important near-term catalyst. In an early August regulatory filing, SK Hynix said it was actively reviewing additional shareholder return measures and expected to announce them before the end of the third quarter. That timeline is earlier than management’s prior comment on the second-quarter earnings call, when it said a plan would come before year-end.
The bank said the market would likely welcome a gradual shareholder return policy. Over the next three years, it expects SK Hynix to generate cumulative free cash flow of more than 800 trillion won. Combined with extra cash from the recent sale of its Kioxia stake, JPMorgan said the company’s cash-generation profile stands well above peers.
The report also said many investors had originally expected SK Hynix to offer shareholder return commitments stronger than those seen from memory peers in Japan and the United States.
54 trillion won capex seen as groundwork for 2030 capacity target
SK Hynix last week announced a 54 trillion won capital spending plan, or about $38.1 billion, to build two new memory chip plants. Of that total, 35.2 trillion won is allocated to the Y2 DRAM fab in the Yongin cluster, slightly above the 31 trillion won plan for the first Yongin phase, while 19.1 trillion won is earmarked for the M17 NAND fab in Cheongju.
JPMorgan said the figure looks large only if it is viewed in isolation. The Y2 project is the second of four planned clusters in Yongin and is expected to break ground in July 2027, mainly to support capacity expansion after 2031. The M17 project in Cheongju is expected to begin construction in February 2027, with the first clean room targeted for completion by the end of 2028. Investment there is set to continue through April 2031.
In the bank’s view, the announced capex is consistent with SK Hynix’s previously stated goal of reaching one million wafers of capacity by 2030. It should not be read as a short-term aggressive expansion move.
Solidigm IPO still under review, strategic value seen as limited
Management said SK Hynix is still evaluating a possible initial public offering for its U.S. subsidiary Solidigm and will revisit the matter in one month. JPMorgan took a cautious view of that plan and said the strategic case for an IPO appears limited.
The report said SK Hynix bought Solidigm from Intel in 2021 mainly to secure enterprise SSD capabilities. After a loss-making period in 2023, JPMorgan said that decision has proved successful. The bank also said the NAND market has entered a supercycle under AI demand, with margins above 70%.
Given SK Hynix’s current internal cash generation and balance sheet strength, JPMorgan said the company can fund its capex without diluting existing shareholders. The bank also noted that listing Solidigm could trigger South Korea’s dual-listing rules, while the benefit from broadening the investor base or seeking a valuation rerating appears limited.
Overweight rating maintained
JPMorgan’s conclusion was that last week’s selloff was more about an overreaction to near-term headlines than a deterioration in fundamentals. Its key points were that media reports on HBM pricing discounts had been misread, the shareholder return plan is likely to arrive earlier than previously expected, and the 54 trillion won capex program aligns with the company’s 2030 capacity goal rather than a near-term expansion surge.
The bank maintained its Overweight rating and 2.75 million won target price for SK Hynix, which it said implies roughly 7 times average earnings per share for 2026 to 2027.
The original article said the piece was a summary and interpretation by Chaoxiang Research of a third-party brokerage report from JPMorgan dated Aug. 9, 2026, combined with public market information. It added that the ratings, target price, earnings forecasts, and related views cited in the article were the opinions of the brokerage analysts and represented only the position of their institution, not the view of Chaoxiang Research, and did not constitute investment advice. The article also said market decisions should be made independently and that the report should not be used as the basis for buying or selling any security.