Micron shares surge as SK Hynix predicts prolonged memory chip supercycle

Wednesday 29 October 2025 - 14:20

By: Dakir Madiha

Micron shares surge as SK Hynix predicts prolonged memory chip supercycle

Micron Technology's stock jumped in pre-market trading on Wednesday, October 29, following optimistic projections from its competitor SK Hynix regarding a sustained "supercycle" in memory chips driven by rising demand for artificial intelligence (AI). The South Korean memory chipmaker’s forecast signals strong industry-wide momentum that could benefit major players across the sector.

Record-breaking performance fuels optimism

SK Hynix reported record results for the third quarter, with operating profit surging 62% year-over-year to 11.38 trillion won ($8 billion) and revenue increasing 39% to 24.45 trillion won. The company, a key supplier of high-bandwidth memory (HBM) chips to Nvidia, attributed these stellar results to robust demand from AI data centers and premium memory products.

"The expansion of AI infrastructure investments by global clients has driven overall memory demand," SK Hynix stated. For the first time in its history, the company’s quarterly operating profit surpassed 10 trillion won, with its operating margin rising to 47%, up from 41.4% in the previous quarter.

Notably, the company revealed that its entire memory chip production for 2026 is already sold out, with HBM supply expected to remain tight until 2027. SK Hynix plans to begin shipping next-generation HBM4 chips in the fourth quarter, following the conclusion of negotiations with key clients.

Industry-wide gains anticipated

The bullish outlook extends beyond SK Hynix, with analysts forecasting that the memory chip supercycle will also benefit competitors like Micron and Samsung Electronics. Kim Kyu-hyun, head of DRAM marketing at SK Hynix, highlighted the structural supply constraints caused by the industry’s pivot toward HBM production, which has created a supply-demand imbalance.

"This structural limitation on DRAM supply is expected to sustain the ongoing prolonged memory supercycle, as supply growth lags behind accelerating demand," Kim said. The HBM market alone is projected to grow by over 30% annually over the next five years, with the global chip market entering a rare three-year "ultra supercycle," according to analysts.

Recent data suggests the global HBM market could reach $43 billion by 2027, up from $2.93 billion in 2024. SK Hynix currently leads the market with a 64% share, followed by Micron at 21% and Samsung at 15%.

Wall Street reacts positively

Wall Street analysts have responded favorably to the positive trends in the memory sector, with several firms raising their price targets for Micron. Citigroup recently increased its target to $275 per share, citing "the strongest quarterly DRAM price surge since the 1990s." The consensus price target among 30 analysts is between $196 and $216, with most maintaining buy recommendations for the stock.