TLDR
- SK Hynix sold out all chip production for 2026 due to AI demand and posted record quarterly operating profit of $8 billion, up 62% year-over-year
- Micron Technology stock jumped 2.8% in premarket trading, extending its six-month rally to approximately 190%
- SK Hynix forecasts 30% compound annual growth rate for High Bandwidth Memory through 2030, projecting market could reach $150 billion
- Seagate Technology beat earnings expectations with $2.63 billion in revenue and guided higher for next quarter on strong data storage demand
- Citigroup raised Micron price target to $275 per share, predicting largest quarter-on-quarter DRAM price increase since the 1990s
Micron Technology stock climbed 2.8% in premarket trading Wednesday after competitor SK Hynix delivered a surprisingly strong third quarter report. The South Korean chipmaker’s results painted a picture of surging demand that extends well into next year.
SK Hynix announced it has completely sold out its chip production capacity for 2026. The company cited overwhelming demand driven by artificial intelligence applications. This marks a rare moment when a major chipmaker has visibility on orders stretching more than a year ahead.
The Korean company posted record quarterly operating profit of approximately $8 billion. That represents a 62% increase compared to the same period last year. Revenue jumped nearly 40% to just over $33 billion.
SK Hynix serves as a key supplier to Nvidia. The company’s DRAM marketing head Kim Kyu-hyun said capacity constraints in traditional DRAM memory chips will likely continue. This is happening because AI demand is consuming production capacity that would normally go to other applications.
“This structural constraint on DRAM supply is expected to support the current prolonged memory supercycle, as supply growth lags behind accelerating demand,” Kim stated.
Memory Chip Pricing Forecast
Citigroup analyst Christopher Danely raised his price target on Micron stock by $25 earlier this week. His new target sits at $275 per share. The analyst predicts the largest quarter-on-quarter increase in DRAM pricing since the 1990s.
Danely sees AI demand and capacity constraints driving a 20% increase in Micron earnings. These same factors are reshaping the entire memory chip market.
Both Micron and SK Hynix produce high-bandwidth memory chips known as HBM. These specialized chips play a crucial role in AI technologies. Micron’s HBM3e version gets embedded into Nvidia’s Blackwell GPUs, which remain in high demand.
SK Hynix projected a 30% compound annual growth rate for HBM through the end of the decade. The company’s forecast suggests the HBM market could reach $150 billion by 2030. That figure runs nearly 50% higher than Micron’s previous projection of over $100 billion for the same timeframe.
Strong Industry Signals
The memory chip sector received additional support from Seagate Technology on Tuesday evening. The disk drive manufacturer posted fiscal first-quarter revenue of $2.63 billion, beating analyst expectations.
Seagate guided current quarter revenue higher to around $2.7 billion. CEO David Mosley pointed to “clear visibility into sustained demand strength.”
“AI is transforming how content is being consumed and generated, increasing the value of data and storage,” Mosley said. Seagate’s performance matters because disk drives for data storage often serve as an early indicator of memory demand trends.
Micron stock has added more than $160 billion in market value over the past six months. The share price reached $228.10 in premarket trading Wednesday, extending the stock’s six-month surge to approximately 190%.
The Boise, Idaho-based company reported fiscal fourth quarter results last month. Revenue surged 46% to $11.2 billion with earnings of $3.03 per share. Management forecast fiscal first-quarter revenue around $12.5 billion with earnings near $3.75 per share.
Wolfe Research analysts noted that SK Hynix’s optimism on both commodity memory and HBM carries direct implications for Micron. The firm expects Micron is gaining market share in HBM during 2026.
SK Hynix stated it has already secured HBM orders for 2026 with pricing agreements locked in at profit levels similar to this year. The company plans to accelerate investment to address chip shortages expected to extend into 2027.
The Korean chipmaker projected DRAM bit growth exceeding 20% year-over-year for 2026. NAND growth is expected in the high teens percentage range for the same period.
Micron will report its fiscal first-quarter earnings on December 17.
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