SK Hynix Maps Out $37 Billion Buildout, Pursues US Listing as Nomura Sets 4 Million-Won Target

$14.8 billion in assets under construction, $22.5 billion in commitments for projects yet to break ground

Spending gathers pace at Yongin cluster and Cheongju packaging fab

Nomura lifts target price to 4 million won on HBM growth bet

SK Hynix’s medium- to long-term investment roadmap has come into sharper focus. As construction of its Yongin semiconductor cluster gathers pace, the company is also pursuing a US listing, underscoring its push to cement leadership in the high-bandwidth memory, or HBM, market.

According to the company’s first-quarter report filed on May 19 with South Korea’s Financial Supervisory Service, assets under construction stood at 20.3856 trillion won ($14.8 billion) as of the end of March. That was down slightly from 21.7698 trillion won ($15.8 billion) at the end of 2025, but remained above 20 trillion won. The figure reflects spending on fab construction and equipment installation before completion.

First-quarter property, plant and equipment acquisitions totaled 7.3480 trillion won ($5.3 billion). That was down from 9.7416 trillion won ($7.1 billion) in the previous quarter, but nearly 25% higher than 5.8837 trillion won ($4.3 billion) a year earlier. The company has continued to spend several trillion won each quarter to expand production capacity.

Commitments for unstarted projects jump 4.6-fold in one quarter

Purchase commitments for property, plant and equipment that have not yet broken ground reached 30.9219 trillion won ($22.5 billion) at the end of the first quarter. That was up more than 4.6 times from 6.6679 trillion won ($4.8 billion) at the end of 2025. The increase appears tied to board approval in February for construction investment covering Zones 2 through 6 of the first-phase fab area at the Yongin semiconductor cluster.

Combined with projects already under way, the total investment pipeline comes to about 51 trillion won ($37.1 billion). In April, after the reporting period, SK Hynix also finalized plans to build P&T7, a dedicated advanced packaging fab at Cheongju Technopolis, with an investment of 19 trillion won ($13.8 billion). That suggests an even heavier medium- to long-term investment burden.

Competitors are also increasing HBM spending, but SK Hynix is accelerating upfront investment through the Yongin cluster and the Cheongju packaging fab. The move is aimed at defending its lead in the HBM market.

US listing and R&D gain momentum

Another notable item in the report was the company’s push for a US listing. SK Hynix said it confidentially submitted a registration statement to the US Securities and Exchange Commission for a public offering related to an American depositary receipt, or ADR, listing. It is targeting a listing by the end of 2026, though the size and timing have yet to be finalized.

Research and development spending also rose sharply. First-quarter R&D expenses totaled 2.5504 trillion won ($1.9 billion), up 68.3% from 1.5151 trillion won ($1.1 billion) a year earlier. Labor costs alone were 1.3571 trillion won ($985 million), accounting for more than half of total R&D spending. With first-quarter revenue reaching 52.6 trillion won ($38.2 billion) and topping 50 trillion won for the first time on a quarterly basis, the company’s absolute investment outlay was near a record high.

SK Hynix also disclosed some R&D achievements. It said it developed a 16-gigabit LPDDR6 product based on its sixth-generation 10-nanometer-class, or 1c, process. The chip delivers speeds of up to 10.7 gigabits per second, increases data throughput by 33% from LPDDR5X and reduces power consumption by 20%. It is slated for use in flagship mobile products targeted for release in 2027.

“The company is clearly ahead of rivals in both the pace and scale of investment,” a semiconductor industry official said. A successful US listing could provide additional funding for HBM capacity expansion and further strengthen competitiveness, the person added.

‘Not a cyclical stock but a structural growth story’ as 4 million-won target emerges

Brokerages are also raising their expectations. Nomura said in a May 15 report that it had lifted its target price on SK Hynix to 4 million won from 2.34 million won. It was the first target price from a brokerage to reach the 4 million-won level.

The core argument is a shift in valuation methodology. Memory-chip stocks have long been valued on a price-to-book basis because the industry was viewed as highly cyclical. Nomura argued that framework no longer fits. The spread of agentic AI and rising data-center investment are shifting memory demand from a short-term cycle to a structural growth market.

Nomura said SK Hynix is trading at about six times 12-month forward earnings and should command a valuation closer to TSMC, which trades near 20 times earnings. On Nomura’s estimates, SK Hynix’s operating profit will surge from 28.1 trillion won ($20.4 billion) this year to 48.0 trillion won ($34.8 billion) in 2028. It also forecasts HBM average selling prices per gigabyte rising to $20.90 in 2027 from $12.90 this year.

An analysis of brokerage reports published over the past month using AI-based investment platform Epic AI found that 18 of 21 firms maintained buy ratings. The average consensus target price was 2,136,087 won, implying about 15.7% upside from the current price of 1,846,000 won. Kiwoom Securities projected second-quarter operating profit of 7.0 trillion won ($5.1 billion), while KB Securities forecast full-year 2026 operating profit of 27.7 trillion won ($20.1 billion).

Still, some caution remains after the recent sharp run-up. BNK Investment & Securities was the only firm to keep a neutral rating, saying risks are rising alongside pervasive optimism. Uncertainty over HBM4 certification, a scenario of rising supply after 2027 and the possibility of weaker PC and smartphone demand after the third quarter remain key medium- to long-term variables. Epic AI Copilot said investors should closely monitor risks including whether customers certify HBM4 and whether the pace of memory-price gains slows after the stock’s rapid rise.

Hong Min-seong, Hankyung.com reporter mshong@hankyung.com