AI Bottlenecks Drive Memory Revaluation, Leaving Samsung and SK Hynix Undervalued

Generative AI is moving beyond model training into inference and enterprise deployment, increasing demand across GPUs, high-bandwidth memory, DRAM, advanced foundry nodes and packaging. Taiwan Semiconductor Manufacturing Co. has emerged as the clearest beneficiary because its manufacturing platform links leading-edge processes with advanced packaging, supporting more durable margins. Samsung Electronics and SK hynix are gaining from a memory shortage, but investors still apply a cyclical discount to earnings that have historically swung sharply with supply, pricing and the wider economy.

ChosunBiz said on May 2 that Samsung posted first-quarter 2026 revenue of 133 trillion won and operating profit of 57.2 trillion won, while TSMC's net income rose 58% to NT$572.4 billion and gross margin reached 66.2%. Separately, Bloomberg reported on April 22 that Samsung and SK hynix traded at forward price-to-earnings ratios below 6, compared with nearly 20 for TSMC, even as their expected 2026 net-income growth far exceeded the foundry leader's. The gap reflects doubt that AI-driven HBM and DRAM shortages will permanently end memory's boom-bust cycle.

As the artificial intelligence industry booms, high-bandwidth memory (HBM) has become a critical component in AI chips. South Korea announced an 800 trillion won semiconductor investment plan in June 2026 that aims to double SK Hynix and Samsung's DRAM capacity by 2030. As the HBM market leader, SK Hynix's expansion pace is crucial to the stability of global AI chipmakers' supply chains and could reshape supply and demand across the semiconductor industry.

Bank of America said in a July 2026 report that technical and construction bottlenecks could limit SK Hynix's additional memory capacity through 2028 to just one-sixth of the planned amount, while bringing new plants to full operation could take 10 years. The constraints threaten its goal of doubling capacity by 2030 and could directly slow its shift toward HBM and other critical AI components. Combined with a price-manipulation lawsuit facing the company, they could also prolong tight memory supplies.

SK Hynix is a major South Korean memory-chip maker and a key supplier of high-bandwidth memory, or HBM, to NVIDIA. As generative AI and high-performance computing expand, HBM has become a critical component in AI accelerators, prompting investors to reassess the company’s growth potential and industry position.

In the latest trading as of July 2026, SK Hynix’s market capitalization exceeded $1 trillion, making it the third Asian company to cross that threshold. Its shares have doubled so far this year and reached a record high, bringing its market value close to that of Samsung Electronics. Micron also crossed the $1 trillion mark over the same period, while UBS raised its price target for the company to $1,525.

The boom in generative AI and data-center construction is driving demand for high-bandwidth memory, or HBM. Samsung Electronics, SK hynix and Micron are shifting resources toward higher-margin products, squeezing supplies of conventional DRAM and NAND. HBM is a critical component in AI accelerators, and shortages could affect server delivery times, electronics costs and the semiconductor industry cycle.

Micron recently reported better-than-expected results, while the market estimates SK hynix’s revenue could reach $54.8 billion. Samsung and SK hynix have said their main memory capacity is fully booked through 2027. The industry estimates that even with manufacturers accelerating HBM capacity expansion, the supply shortfall will still be about 40% at the end of 2027. New capacity may not begin gradually easing the pressure until after 2027 at the earliest.