Kiwoom Securities announced a significant upgrade to its outlook for SK Hynix on November 19, 2025, raising the chipmaker's 2026 operating profit forecast to a massive KRW 80 trillion (approximately USD 61.5 billion based on a notional exchange rate), up from its previous estimate. Reflecting this bullish sentiment, the brokerage also hiked its target price for SK Hynix stock from KRW 650,000 to KRW 730,000 and maintained its "Buy" investment opinion, designating the stock as the semiconductor sector's "Top Pick."
Surpassing Market Consensus with Strong Q4 Performance
The positive adjustment follows the anticipation of a strong finish to the year. Park Yu-ak, an analyst at Kiwoom Securities, projects that SK Hynix's fourth-quarter 2025 earnings will surpass market expectations, with sales of KRW 28.8 trillion and an operating profit of KRW 15 trillion. This operating profit forecast is already higher than the market consensus of KRW 14.1 trillion.
The analyst attributes the upward revision of the 2026 operating profit to KRW 80 trillion primarily to adjustments in the projected prices of commodity memory products.
“We have raised the estimated quarter-over-quarter price increase for commodity memory products from 27% to 37%. Further price increases in the fourth quarter appear possible. It is therefore appropriate to raise the expectations for future earnings.”
For the full year of 2026, Kiwoom Securities forecasts annual sales of KRW 136.2 trillion and an operating profit of KRW 80 trillion. These figures represent a staggering 46% and 86% year-on-year increase, respectively, underscoring the expected sharp acceleration of the memory upcycle.
Memory Chip Upcycle Gains Momentum
The momentum is not expected to slow down, even during the traditional off-season. The brokerage anticipates that the first quarter of 2026—historically a weaker period—will also significantly outperform consensus, posting sales of KRW 30.2 trillion and an operating profit of KRW 17.3 trillion.
The underlying driver for this optimistic outlook is the robust recovery cycle in the DRAM (Dynamic Random-Access Memory) market. Park pointed to several interconnected factors fueling the price-driven rally:
Low Distribution Inventory: Significantly reduced stockpiles across the supply chain.
Supply Constraint: A temporary decrease in the supply of DDR5 DRAM as manufacturers shift production capacity to meet growing demand for the older DDR4 standard.
Server Demand Improvement: Stronger demand for server DRAM, signaling a recovery in corporate and data center IT spending.
This confluence of factors is generating a recovery cycle "centered on price increases," with the initial intensity exceeding prior expectations.
Furthermore, this positive trend, or "warmth," is now observed to be spreading to the NAND (Non-Volatile Flash Memory) sector, broadening the recovery across the entire memory market. While there is a potential concern that the steep rise in DRAM prices could eventually lead to a decline in demand for PCs and smartphones, the analyst concluded that the upward revision of price forecasts and market consensus will serve as the primary momentum driving the stock price higher for the foreseeable future. The new target price of KRW 730,000 reflects the adjustments made to the earnings forecasts spanning from 2026 to 2028.
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