SK Hynix, Micron Cross US$1 Trillion Market Cap Threshold

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 the rapidly-growing AI infrastructure buildout.

On Thursday (May 28) SK Hynix closed with a market capitalization of approximately 1,631 trillion won (US$1.08 trillion). The milestone follows Idaho-based Micron Technology’s entry into the trillion-dollar club on Tuesday (May 27), when its stock surged 19 per cent to close at US$895.88.

The equity rally has also compressed the valuation spread in the South Korean domestic stock market.

According to data from the Korea CXO Institute, the market capitalization gap between SK Hynix and Samsung has narrowed to the 6 percent range, dropping into the single digits for the first time in over a year.

Exactly one year ago, the valuation gap stood at more than double that margin; when Samsung Electronics' valuation was indexed at 100, SK Hynix sat at 45.8.

Samsung's market value currently stands at approximately 1,750 trillion won (US$1.16 trillion) after crossing the US$1 trillion mark earlier this month. Both companies continue to trail Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE:TSM), which was Asia's first trillion-dollar corporation.

Industry-wide, expenditure on procurement efforts have also increased. Microsoft (NASDAQ:MSFT) recently guided full-year capital expenditures to US$190 billion, identifying US$25 billion of that total as driven by rising component costs, specifically semiconductors.

This procurement rush has led to capital proposals from global technology companies seeking to guarantee future inventory. According to a Reuters exclusive, industrial buyers have offered to directly fund 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 fabrication plant in the Yongin complex in South Korea, where dynamic random-access memory (DRAM) will be the primary focus.

However, SK Hynix management has remained cautious about accepting these direct customer investments, citing risks that such agreements could lock the company into discounted long-term pricing structures or limit commercial flexibility.

Financially, the pricing leverage resulting from the crunch has yielded record margins. SK Hynix reported a fivefold increase in quarterly net profit for the three months ended March, reaching a record 40 trillion won, driven by its early-mover advantage in supplying HBM3 and HBM3E layers to NVIDIA (NASDAQ:NVDA).

The company also filed an application with the US Securities and Exchange Commission (SEC) in March to list American depositary receipts on a US exchange later this year.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.