These chip stocks could extend historic gains, according to Nomura
South Korea’s chip stocks have been smashing records, hitting historic highs and powering the Kospi index to new peaks — and they still have more to room run. The Kospi notched a 75% gain in 2025, and has rallied 78% so far this year, with most of these gains being driven by two South Korean chip stocks: SK Hynix and Samsung Electronics, which have risen 183% and 134%, respectively this year. Shares had gained 274% and 125% in 2025. The stocks are set to build on those superlative returns as demand for memory chips used by AI companies continues to soar. According to Nomura, Samsung — the world’s largest memory maker — could rally over 110% this year and SK Hynix by about 117%, based on Monday’s closing prices. Nomura, which has a “buy” rating on both companies, estimates SK Hynix stock to hit 4 million won and Samsung Electronics to reach 590,000 won over the next 12 months. That’s because the memory industry has been in a “structural growth phase,” since the launch of ChatGPT in December 2022, which triggered considerable growth in high-bandwidth memory, or HBM demand. Samsung and SK Hynix are among the largest producers of HBM chips. SK Hynix, the top HBM player, is expected to lead in the production of the advanced HBM4 chips, with Samsung also a strong contender in the space. The chips are used in AI and high-performance computing applications. Customer demand for HBM and high-performance memory already appears to exceed the industry’s mid- to long-term supply capabilities, according to Nomura. Memory demand could rise by “several thousand-fold” over the next five years, but industry supply growth is only going to grow about five to six times, the brokerage said. “The adoption of Retrieval-Augmented Generation (RAG) and agentic AI applications has accelerated demand for conventional servers and solid state drives (SSD),” the note adds. RAG refers to a process used by large language models where they search web pages, knowledge bases, and databases for correct responses, reducing errors and hallucinations by an AI LLM. There is a “triple memory super-cycle spanning DRAM, HBM and SSD memory” since the third quarter of 2025, Nomura said. DRAM refers to dynamic random access memory, which is used in the AI space to train models and to support inference, including real-time response generation. Separately, the rise of agentic AI will see an increase in new categories of semiconductor demand, including CPUs and commodity memory. This will in turn increase usage for AI servers and drive substantial growth in memory related demand, Nomura wrote. “Against this structural backdrop, we believe memory vendors have entered an unprecedented phase of rapid revenue growth and margin expansion in a short period of time.” Nomura expects annual revenue and earnings growth of about 30% for memory suppliers over the next three to five years, following an estimated seven- to eightfold profit increase in 2026. The brokerage says growth will be supported by about 30% annual rise in volume, stable or slightly higher commodity memory prices under long-term agreements, and improving HBM profitability. Early results from SK Hynix and Samsung highlight this trend. SK Hynix saw its operating profit rise fivefold year on year in the first quarter of 2026, while Samsung’s operating profit soared more than 750% in the same period.
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