KB Securities maintained its buy rating and 420 million won target price for SK Hynix stocks on January 15, forecasting that memory supply shortages driven by artificial intelligence datacenter investment expansion will continue until at least 2028. Research Head Kim Dong-won stated the recent stock price decline stems from psychological concerns rather than fundamental changes. SK Hynix stock fell 36% from its recent high over a three-week period amid worries about AI investment slowdown, though the analyst characterized this decline as a buying opportunity given unchanged long-term AI industry growth prospects and memory supply-demand fundamentals.
Memory Supply Shortage Forecast Through 2028
Kim Dong-won stated that considering future investment plans by big tech companies and explosive AI demand, memory supply shortages will likely continue until at least 2028. He explained that next year, equipment investment will concentrate on high bandwidth memory (HBM), effectively limiting expansion of new production capacity for general-purpose memory. Kim noted that long-term supply agreements (LTA) between big tech and memory companies, set to begin in earnest next year, will have the effect of preemptively securing production capacity. He stated that the 2027 memory supply shortage experienced by general customers will approach virtually zero supply levels.
Meta Expands AI Datacenter Plans to 14GW
Kim dismissed recent concerns about Meta's AI investment reduction as short-term noise. He stated that Meta plans to add 7 gigawatts this year for AI datacenter construction, followed by another 7GW next year, securing a total of 14GW of AI computing infrastructure by next year. The analyst noted that Meta's Hyperion datacenter under construction in Richland Parish, Louisiana will expand to at least 5GW scale, with investment increasing from the initial $10 billion (approximately 15 trillion won) to over $50 billion (approximately 75 trillion won).
FERC Approves Fast-Track Power Grid Connection
Kim projected that AI datacenter investment pace will accelerate further. He stated that the US Federal Energy Regulatory Commission (FERC) approved fast-track simplification of power grid connection procedures, which had been the biggest bottleneck for AI datacenter construction, reducing the existing 5+ year power grid connection period to 1-2 years. The analyst noted that as US big tech companies expand their own power generation facility investments, they can advance AI datacenter construction timelines by more than double compared to previous schedules.
Stock Decline Characterized as Buying Opportunity
Kim stated that SK Hynix stock price declined 36% from its previous high over three weeks due to AI investment slowdown concerns, but the long-term growth path of the AI industry and memory supply-demand environment have not fundamentally changed compared to a month ago. He added that the recent stock price decline will rather become a buying opportunity.
FAQ
What target price did KB Securities set for SK Hynix stocks on January 15?
KB Securities maintained a buy rating and 420 million won target price for SK Hynix stocks on January 15, forecasting memory supply shortages until at least 2028 due to AI datacenter investment expansion.
How much did SK Hynix stock decline over the recent three-week period?
SK Hynix stock fell 36% from its recent high over a three-week period amid concerns about AI investment slowdown, though KB Securities Research Head Kim Dong-won characterized this decline as a buying opportunity.
What is Meta's planned AI datacenter capacity by next year?
Meta plans to add 7 gigawatts this year for AI datacenter construction, followed by another 7GW next year, securing a total of 14GW of AI computing infrastructure by next year, according to KB Securities analyst Kim Dong-won.
