Positive Outlook for Memory in AI Era: CLSA and Barclays Reiterate Positive Ratings for SK Hynix

Global semiconductor stocks have recently come under pressure, with the Philadelphia Semiconductor Index down 20% from its June highs, and South Korea's memory giant SK Hynix plunging approximately 37%. The market's primary concerns center on the sustainability of AI capital expenditures and the emergence of Chinese AI models—such as Kimi 3—that narrow the technological gap at lower costs, potentially weakening demand for high-end computing power and memory.

However, CLSA stated in its latest report that this industry correction is likely nearing an end. CLSA remains optimistic about capital expenditures by cloud hyperscalers through 2027, forecasting a 31% growth rate (reaching a scale of $1.1 trillion), with further upside potential.

CLSA believes that competition among AI models will drive efficiency improvements and cost reductions, thereby accelerating broader AI adoption, which is a long-term positive for overall demand. As a result, CLSA has reiterated its 'High Conviction Outperform' rating for SK Hynix, setting a target price of 3.7 million Korean won for its shares.

Meanwhile, Barclays has also issued a positive signal. Analyst Simon Coles has initiated coverage on SK Hynix, assigning a 'Buy' rating with a target price of $330.