News
SK Hynix to increase 2026 CapEx to Won38 trillion amid HBM4 supply lead for Nvidia and Google
Sunday, December 21, 2025 at 09:22 AM
UBS has significantly raised its financial outlook for SK Hynix, forecasting an 82% operating margin for DRAM by 4Q26 driven by an unprecedented memory upcycle. The firm expects SK Hynix to maintain HBM leadership with a 56% market share in 2026, securing approximately 70% of Nvidia's HBM4 supply for the Rubin platform and shipping first to Google for TPU7e/7p. Additionally, SK Hynix is expected to increase its 2026 capital expenditure to Won38 trillion, up from the previously projected Won35 trillion, to support capacity and technology transitions.
Context
SK Hynix is positioned for a historic financial expansion through 2027, propelled by the relentless demand for high-performance memory in the AI sector. Market forecasts indicate that SK Hynix will see its DDR operating profit surge 2.9x year-over-year by 2026, with these components representing 67% of total profit. Operating margins are expected to hit a peak of 82% by the fourth quarter of 2026, reflecting the company’s dominance in high-margin semiconductor segments like HBM3E.
This growth is set to translate into record-breaking liquidity. The company is projected to generate Won 75 trillion in free cash flow in 2026, rising to Won 98 trillion by 2027. This massive capital influx provides a significant buffer for future R&D and capacity expansion. For investors, these figures suggest a fundamental shift in valuation as the company transitions into a high-margin era driven by its indispensable role in the global AI supply chain.
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