Chipmakers SK Hynix (KRX:000660, OTC PINK:HXSCL) and Micron Technology (NASDAQ:MU) have crossed the US$1 trillion market valuation threshold, joining market leader Samsung Electronics (KRX:005930) in an elite tier of manufacturers capitalizing on fast-paced AI infrastructure buildouts.
On Thursday (May 28), SK Hynix closed with a market capitalization of about 1,631 trillion won (US$1.08 trillion). The milestone came after Idaho-based Micron Technology entered the trillion-dollar club on Tuesday (May 27), when its stock closed 19 percent higher at US$895.88.
The equity rally has also narrowed valuation spreads in the South Korean domestic stock market.
according to data According to Korea CXO Institute, the market capitalization gap between SK Hynix and Samsung has narrowed to the extent of 6 percent, falling into single digits for the first time in a year.
Just a year ago, the valuation gap was more than double that margin; When Samsung Electronics’ valuation was indexed at 100, SK Hynix was at 45.8.
Samsung’s market cap is currently around 1,750 trillion won (US$1.16 trillion) after surpassing the US$1 trillion mark earlier this month. Both companies trail Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE: TSM), which was Asia’s first trillion-dollar corporation.
Industry-wide, spending on procurement efforts has also increased. Microsoft (NASDAQ:MSFT) recently guided for full-year capital expenditures of $190 billion, with $25 billion of the total identified due to rising component costs, particularly semiconductors.
This rush of buying has given rise to capital offers from global technology companies seeking to guarantee future inventory. according to a Reuters exclusiveIndustrial buyers have offered to directly finance SK Hynix’s new manufacturing lines or finance the purchase of extreme ultraviolet (EUV) lithography systems from ASML Holding NV, machines that retail for hundreds of millions of dollars.
One proposal targeted the first construction phase of SK Hynix’s new manufacturing plant at the Yongin complex in South Korea, where dynamic random-access memory (DRAM) would be the primary focus.
However, SK Hynix management has been cautious about accepting these direct customer investments, citing the risk that such agreements could lock the company into concessional long-term pricing structures or limit commercial flexibility.
Financially, pricing gains as a result of the crisis have generated record margins. SK Hynix reported a five-fold increase in quarterly net profit for the three months ended March, reaching a record 40 trillion won, driven by early gains in supplies of HBM3 and HBM3E layers to NVIDIA (NASDAQ: NVDA).
company also filed an application in March with the US Securities and Exchange Commission (SEC) to list American Depositary Receipts on a US exchange later this year.
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Securities Disclosure: I, Gian Liguid, do not have any direct investment interest in any of the companies mentioned in this article.
