On January 28, Jin Ten Data reported that driven by the surge in demand for artificial intelligence, prices for both advanced and traditional storage chips have risen. South Korea's SK Hynix announced on Wednesday that its full-year operating profit for 2025 is expected to reach 47.2 trillion won (approximately 33.1 billion USD), more than doubling year-on-year. Sales in 2025 are projected to reach 97.1 trillion won, a year-on-year increase of 46.8%, with both revenue and profit setting historical records. SK Hynix also announced plans to cancel 12.2 trillion won (approximately 8.57 billion USD) worth of treasury stock. Looking ahead to 2026, SK Hynix expects DRAM demand to grow by more than 20% year-on-year, NAND demand to increase by more than 15%-20%, and the company anticipates a significant increase in capital expenditure for 2026.
Interpretation:
First, let's look at the performance itself. In 2025, operating profit is 47.2 trillion Korean won and revenue is 97.1 trillion Korean won, both setting historical highs, and profit has doubled year-on-year; this level cannot be explained merely by a 'cyclical rebound,' but rather seems to have hit a new round of structural demand. AI servers, computing clusters, and data centers have a continuous and rigid demand for high-bandwidth memory and large-capacity storage, which are not short-term orders but long-term allocations, directly pushing storage chips from being 'strong cyclical products' to 'quasi-strategic resources.'
Next, let's look at the price logic. A very key point is: advanced storage and traditional storage are rising together. This indicates that it's not just a single high-end product that is in short supply, but the entire storage supply-demand structure is tightening. It can be understood that in the kitchen, not only are the steaks expensive, but even eggs and flour are rising, indicating that there are suddenly more diners, and in a short time, it's not possible to produce that many dishes. What AI brings is not the popularity of a specific type of chip, but a systemic upward shift in overall storage capacity and bandwidth demand.
The action of canceling treasury stock is also quite intriguing. The company chooses to repurchase and cancel shares when its performance is at its strongest, essentially sending a signal to the market: cash flow is very abundant, confident in its long-term value, and not in a hurry to hoard stocks or defend. This will further strengthen the market's perception of the company's fundamentals and the industry's prosperity.
Looking ahead to 2026, SK Hynix expects DRAM demand to grow by over 20%, NAND also has a growth of 15%-20%, while capital expenditure is significantly increasing. This means the company believes: the demand driven by AI is not a temporary trend, but has entered a stage where 'expansion may not keep up.' An upward trend in capital expenditure often occurs in cycles where the industry has a high degree of certainty regarding future orders and prices.
AI is transforming storage chips from 'cyclical gaming products' into 'long-term demand assets.' The rise in memory prices is not just speculation but is supported by real demand, which is also why the market has recently seen a divergence of 'memory prices rising, precious metals rising, pure risk assets fluctuating.'