The Memory Supercycle Is Back in Motion — and Samsung and SK Hynix May Be the Stocks With the Most Torque

Memory chip makers used to be cyclical and risky to enter after explosive upside runs. But what if things are different this time around, with the AI revolution continuing to move forward while AI data center builds continue hogging up all the DRAM and SSDs? Indeed, the memory supercycle has continued to run higher, and while the shares of the top players in the space can’t run forever, it’s probably going to be really difficult to time a peak.

Micron (NASDAQ:MU | MU Price Prediction) has been a go-to play for investors seeking convenient exposure to the boom in high-performance memory. Shares have gained an incredible 565% in the past year alone, and while further gains might be tougher to come by, I do think that the AI bulls might wish to consider diversifying into some of the other memory chip titans as well. There aren’t many of them, but the ones outside of the U.S. might be able to provide a bit more torque as a memory supercycle looks to unfold.

The memory boom might not be over quite yet, say many analysts

While Micron still has more than its fair share of bullish analysts, some of whom expect a move that could entail a nearly doubling of shares from current levels (can you believe the Street-high target is set at $1,000 per share after the explosive past-year run? Neither can I, but I get the bull case), I do think that the South Korean memory players in Samsung and SK Hynix can also bring a lot to the table.

Most notably, SK Hynix is arguably the king of high-bandwidth memory. It’s not only a force to be reckoned with, but its operating margins are enviable, currently standing at 72% as of the first quarter.

Now, Micron’s margins are also impressive, and with room to run, but in terms of leadership, I do see SK Hynix as a brilliant complement to the likes of a Micron, especially once the shares go live on the U.S. markets, possibly in the summer. As to whether trading in the U.S. exchange allows the relatively-cheap memory maker to enjoy a multiple re-rating remains to be seen.

The South Korean memory titans have also been red-hot

Either way, the fast-growing memory pure-play is going to make for a fascinating watch, especially if other investors become a bit distracted by the mega AI IPOs that are also slated to go live this year, with SpaceX potentially ready for a launch in June. In terms of closeness to Nvidia (NASDAQ:NVDA), I think it’s tough to look past SK Hynix, a South Korean juggernaut that could quickly become a household name if it isn’t already.

As for Samsung, it’s a conglomerate that also has a ton of skin in the memory supercycle. As it leverages its resources to really floor it to expand production capacity, the South Korean heavyweight might also be worth stashing away. Any way you look at it, Samsung is using its size to its advantage, and for that reason alone, the firm is also worth considering along with SK Hynix for exposure to the rest of the booming memory market.

For those not willing to wait for a U.S. listing in these South Korean memory plays, the iShares MSCI South Korea ETF (NYSEARCA:EWY) looks to be the play. While it’s an ETF that bets on all of South Korea, the ETF is incredibly top-heavy, with Samsung and SK Hynix contributing to more than 25% of the ETF. That’s huge. It’s no mystery why the ETF is up 189% in the past year, with 57% of those gains coming year to date.