From near-bankruptcy to chip king: SK Hynix eclipses Samsung in market value

SK Hynix has achieved what once seemed unthinkable. The South Korean memory-chip maker, which came close to collapse two decades ago under a crushing debt burden, has overtaken Samsung Electronics to become the country's most valuable listed company, underscoring how artificial intelligence is redrawing the global semiconductor landscape.

Shares of SK Hynix rose 5.7 per cent on Monday, lifting its market capitalisation to 2,082.5 trillion won (about $1.35 trillion), narrowly surpassing Samsung Electronics at 2,081.3 trillion won, excluding preferred shares. The milestone marks the first time since 2000 that Samsung has been displaced from the top spot in South Korea's corporate hierarchy.

The shift reflects more than investor enthusiasm. It signals a structural transformation in the semiconductor industry, where advanced memory chips have become indispensable to the AI revolution and where SK Hynix has emerged as the clear leader.

AI changes the rules of the chip industry

For decades, memory chips were viewed largely as commodities, subject to volatile boom-and-bust cycles driven by supply and demand imbalances. The rise of artificial intelligence has changed that equation.

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High-bandwidth memory (HBM) chips, which enable AI processors to handle vast amounts of data at extraordinary speeds, have become one of the most critical components in modern computing infrastructure. Demand has surged as technology giants including Nvidia, Google, Microsoft and Meta race to expand AI capabilities and build next-generation data centres.

SK Hynix has positioned itself at the centre of that boom.

The company has established itself as the dominant supplier of HBM chips used alongside Nvidia's AI accelerators, giving it a decisive advantage in one of the fastest-growing segments of the semiconductor industry.

That leadership has transformed investor perceptions of the company and fuelled one of the strongest rallies in global technology stocks.

A comeback few predicted

SK Hynix's rise is among the most dramatic corporate turnarounds in South Korean history.

In 2002, then-Hynix Semiconductor was struggling under debts accumulated during an aggressive expansion drive. The company came close to being acquired by US rival Micron Technology as creditors searched for ways to rescue the troubled chipmaker.

The proposed deal eventually collapsed, leaving Hynix under creditor control for years. Investor confidence evaporated and the company's shares plunged to as low as 135 won in 2003, earning it the reputation of a penny stock among domestic investors.

Even after stabilising its operations, SK Hynix remained exposed to the cyclical nature of the memory market.

The downturn of 2023 illustrated those risks. Falling memory-chip prices pushed the company to an annual operating loss of 7.73 trillion won as global demand weakened.

Just a year later, the picture changed dramatically.

As AI-related spending accelerated worldwide, demand for advanced memory chips tightened supply conditions and pushed prices sharply higher. SK Hynix reported an annual operating profit of 23.5 trillion won in 2024, a record at the time and a striking reversal from the previous year's losses.

Samsung faces a changing market

The market value crossover also highlights how AI is altering competitive dynamics among semiconductor giants.

Samsung Electronics remains one of the world's largest technology companies, with businesses spanning smartphones, televisions, consumer electronics, foundry services, logic chips and memory semiconductors.

SK Hynix, by contrast, is far more focused on memory chips and has been able to capitalise more directly on the surge in AI-related demand.

Investors have rewarded that focus. SK Hynix shares have gained more than 340 per cent this year, compared with roughly 200 per cent for Samsung Electronics.

The rally has propelled SK Hynix past not only Samsung but also US rival Micron Technology, making it the world's most valuable memory-chip maker.

The new economics of AI

Analysts say the company's ascent demonstrates how AI is creating new winners across the technology sector.

Unlike previous technology cycles that primarily benefited chip designers and software firms, the AI boom has elevated memory manufacturers into strategic players because advanced AI systems require enormous amounts of high-performance memory to function efficiently.

As global spending on AI infrastructure continues to accelerate, companies that control critical parts of the supply chain stand to capture a disproportionate share of the gains.

For SK Hynix, that has meant a remarkable journey from near-bankruptcy to the pinnacle of South Korea's stock market.

With inputs from agencies.