Memory Supercycle Effect Spreads, SK Hynix Equipment Suppliers Request 3%-4% Price Hikes

Tradingkey - During the Asian trading session on June 11, South Korean media outlet ETNews reported that SK Hynix has received price hike requests from several Tier 1 equipment suppliers, seeking to increase supply prices by approximately 3%-4%. SK Hynix has requested the relevant companies to submit supporting documentation for the price hikes pending evaluation.

Industry insiders pointed out that this price hike is somewhat unusual. In the semiconductor industry, price increases by raw material and component suppliers due to cost fluctuations are common, but proactive price hikes by equipment manufacturers are relatively rare. Equipment costs are concentrated in fixed capital, R&D, and technical value-add, making them difficult to pass through via raw material price fluctuations. According to industry convention, initial supply prices for equipment are the highest, with subsequent repeat purchases typically requiring a price reduction of about 10%. Equipment manufacturers raising prices against the trend reflects that the constraints of core equipment delivery capacity on production expansion are deepening significantly.

SK Hynix has launched a large-scale capacity expansion plan. SK Group Chairman Chey Tae-won stated that SK Hynix's total wafer capacity will double within the next five years and is planned to triple by 2034. Capital expenditure for 2026 is expected to significantly exceed the 2025 level of approximately $20 billion, with capacity construction accelerating across the board. The expansion directly drives up demand for upstream equipment and components, further strengthening the bargaining power of equipment suppliers.

Impacted by the explosion in AI demand and rigid supply-side capacity constraints, the global memory market has entered a seller's market. Analysts believe that leading foundries beginning to seriously evaluate upward adjustments to equipment procurement prices signifies that, under the semiconductor supercycle, the weight of equipment suppliers' delivery capacity and response speed in influencing production schedules is increasing markedly.

The market is broadly concerned with whether this price hike will spread to wider equipment and materials sectors, and whether the earnings prosperity of major semiconductor firms can be transmitted to upstream manufacturers. Whether the relevant price hike requests will ultimately be approved remains subject to SK Hynix's subsequent evaluation.

The price hikes for equipment indirectly confirm the robust demand for AI and HBM. The market typically views this as a signal of an industry upswing, which favors SK Hynix's revenue outlook. Even if short-term costs rise and gross margins face some pressure, as long as capacity is released smoothly and shipment volumes grow, the earnings outlook remains positive.

[Source: TradingView]

For the stock price, this news is relatively positive. Capacity tightness will drive up product prices, thereby lifting performance expectations, which is expected to provide mild support for SK Hynix's share price, especially since expectations for a global memory bull market have not been fully priced in. If SK Hynix forcibly suppresses prices or delays procurement, it may trigger concerns over expansion progress; if it quickly approves the price hikes, it will bolster market confidence in capacity release.