RBC: The price of HBM may rise nearly double by 2027
RBC Capital Markets released a research report stating that the demand for artificial intelligence continues to exceed supply, and the rise in high bandwidth memory (HBM) prices is expected to support the overall average selling price of DRAM. Memory chip manufacturer SK Hynix will continue to benefit from the memory chip upcycle. The report indicates that HBM prices could rise by 80% to 100% by 2027. RBC believes that the DRAM upcycle, which has already lasted for 14 quarters, will continue for another five quarters, with supply tightness expected to persist until 2027.RBC expects SK Hynix's third-quarter performance to slightly exceed market consensus, with revenue projected to reach 101.2 trillion Korean won and adjusted earnings per American Depositary Share to be 8,917 won (approximately $6.72). The DRAM contract price is expected to increase by 20% quarter-on-quarter in the third quarter, with a potential further increase of 15% in the fourth quarter. RBC reiterated its "Outperform" rating with a target price of $200, about 40% higher than the latest closing price. In the U.S. stock market, SK Hynix's stock price surged over 4% on Monday, closing at $142.62.Nomura Securities recently stated that the shortage of memory chips will continue until 2028, maintaining "Buy" ratings for Samsung Electronics and SK Hynix, with target prices of 670,000 won and 4.7 million won, respectively. KB Securities in Korea stated on Monday that the price-to-earnings ratios of both companies have dropped to about 3 times. This Wednesday, SK Hynix will release its third-quarter financial report, and according to a FnGuide survey, analysts expect revenue of 98.2 trillion won and operating profit of 77 trillion won. According to media reports, the company is considering distributing a special dividend of about 16 trillion won.
