The doubling of prices within the year raises concerns about overheating! SK Hynix receives a warning from the South Korean Stock Exchange for the second time in over a month.

The operator of South Korea's main stock exchange issued a warning for the second time in about a month regarding the skyrocketing stock price of SK Hynix, raising concerns that the stock may be overheated. The South Korean exchange issued a one-day "investment alert" for the stock on Tuesday. This alert will not halt trading, but suggests that investors should proceed with caution. As a result of this news, the stock dropped nearly 2% in early trading. Such alerts are usually triggered when there is a sudden or unexplained significant change in trading volume or price. SK Hynix's stock price rose by 6.1% on Monday, leading to speculation in the market that the company is planning to issue American Depositary Receipts (ADR). The company, however, stated that there has been no confirmation of any ADR-related matters. As a major supplier of High Bandwidth Memory (HBM) to AI chip giant NVIDIA Corporation (NVDA.US), SK Hynix's stock price has more than doubled this year. It is worth noting that on November 3, the South Korean stock exchange issued an "investment alert" for SK Hynix's stock, which lasted for one day. The exchange stated that this decision was made based on the stock's significant rise. Following this alert, on November 4, the company's stock on the South Korean exchange plummeted by as much as 5.3%. Such alerts from the exchange are relatively rare for a large listed company, and they serve as a warning signal before triggering higher-level warnings, which will limit margin trading. If a stock is under investment alert status and meets one of the eight criteria, such as rising by 100% in three trading days, the exchange will issue an investment warning; furthermore, if the stock rises by 40% in two trading days, trading will be suspended for one day. AI demand booming, SK Hynix Q3 profits at record high Benefiting from the global AI infrastructure construction boom and the resulting boost in memory demand, SK Hynix's third-quarter sales reached 24.5 trillion Korean won, with operating profit reaching a record high of 11.4 trillion Korean won. SK Hynix plans to invest more funds next year to increase its production capacity, accelerate production growth, and catch up with an unprecedented surge in investment led by industry leaders such as OpenAI and Meta (META.US). SK Hynix will begin supplying next-generation HBM4 components to customers this quarter and will fully launch sales by 2026. During the earnings conference call, SK Hynix executives stated that HBM chips have been sold out since 2023, and supply will remain tight until 2027. The company mentioned that the memory market has entered into a super cycle, witnessing a structural shift in memory demand. Looking forward, many investors and tech companies believe that the emergence of AI will usher in a "super cycle" in the memory market, especially for HBM chips needed to manufacture AI accelerators and services like ChatGPT. This is undoubtedly a great advantage for SK Hynix, the leader in the HBM industry. Analysts predict that SK Hynix's sales and profits are expected to significantly increase in 2026, driven by the demand for DRAM and NAND chips. The company announced in its financial report that DRAM bit demand (total volume) may increase by over 20% next year. More importantly, NAND sales volume is expected to increase significantly as SK Hynix projects a 17%-19% increase in bit demand by 2026. Higher demand can raise sales prices, thereby boosting SK Hynix's profits.