SK Hynix Sees the Memory Shortage Lasting Through 2030. 2 Memory Stocks to Buy and Hold Until Then.
Key PointsSK Hynix's third-quarter revenue passed 100 trillion won for the first time, with an operating margin of 80%.
SK Hynix, a South Korean memory chip manufacturer, anticipates the ongoing memory chip shortage will persist until at least 2030. In late October, the company reported record third-quarter results, projecting demand to outstrip supply throughout the decade, citing the increasing complexity of leading-edge manufacturing and the lengthy construction times for new plants.
The company's third-quarter revenue surged past 100 trillion won for the first time, growing 328% year over year to around 104.6 trillion won. Operating profit increased 632% to approximately 83.3 trillion won, with an operating margin of 80%.
Investors have not factored in such a prolonged shortage, as SK Hynix and Micron Technology, both memory stocks, currently trade at less than 6 times their expected earnings for fiscal 2027. Micron's stock has dropped about 20% since its record close on June 25. The company has signed long-term agreements with 14 major customers, covering over 50% of its total production capacity for 2027 and 2028.
Revenue grew significantly from 52.6 trillion won in the first quarter to 104.6 trillion won in the third quarter. However, the pace of growth has slowed, with sequential revenue growth declining from 51% to 32% and operating profit growth reducing from 61% to 38%.
Micron Technology, an Idaho-based company, also expects memory supply to remain below demand in 2027 and 2028, with conditions tightening compared to 2026. The company has signed 26 strategic customer agreements, accounting for more than 35% of its revenue through 2030, with some commitments extending into 2031. Micron's revenue reached $54.2 billion in fiscal Q4 2026, up from $11.3 billion a year earlier, and it expects record earnings of around $61.5 billion for fiscal Q1 2027.
However, this projection implies a sequential growth rate of about 13%, down from 31% in fiscal Q4. At approximately $972 a share, Micron's stock is priced at about 5.5 times the earnings investors anticipate for fiscal 2027.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
