Chip stocks rebounded, but this one fell: How long can Micron's premium last when Korean giants are at the doorstep?

Author | Eric

Yesterday, following positive signals from Trump, the market rebounded, with widespread gains in the semiconductor sector. However, high-flying stocks that had previously surged $Micron Technology (MU.US)$ 、 $SanDisk (SNDK.US)$ both saw contrarian declines. What exactly happened?

Why did Micron fall against the trend?

The most direct trigger might be pre-market media reports stating that SK Hynix plans to issue ADRs in the U.S. to raise $8 billion, representing approximately 2.4% of its total share capital, with all proceeds being funneled into AI infrastructure projects such as the Yongin semiconductor cluster.This move aims to leverage the U.S. capital markets to revalue its discount relative to Micron.Last week, the chairman of SK Group publicly stated at $NVIDIA (NVDA.US)$ GTC 2026 that SK Hynix is considering advancing its ADR listing.

Micron trades at a noticeable premium compared to SK Hynix

Due to $Micron Technology (MU.US)$ The latest earnings report has been released, while Samsung Electronics and SK Hynix's Q1 reports are yet to be announced, possibly inflating their Bloomberg Blended Forward 12-month P/E ratios.

However, even under these circumstances, Samsung Electronics, which has exposure to consumer electronics such as smartphones and home appliances, $CSOP Samsung Electronics Daily (2x) Leveraged Product (07747.HK)$ has a forward P/E of less than7x, and SK Hynix, with purer exposure to memory, $CSOP SK Hynix Daily (2x) Leveraged Product (07709.HK)$ is below5 times, both lower than Micron's US stock5.3 timesP/E, as well as $SanDisk (SNDK.US)$'s 9.5 timesP/E.

Since Western Digital does not own its own memory wafer fabrication facility and instead operates a joint venture (JV) wafer plant with a Japanese partner $Kioxia Holdings (285A.JP)$ , it is not suitable for P/B valuation. On the other hand, Samsung Electronics, which owns its own wafer fabrication facilities, trades at a forward P/B of approximately2.1 times, while SK Hynix trades at a forward P/B of about2.4 times, both of which are lower than Micron's forward P/B of roughly2.6 times。

The simplest valuation comparison: How do DRAM/NAND market shares compare?

For novice investors who may find valuation metrics overly complex, the simplest 'valuation' assessment can be made by comparing market share with market capitalization.

According to TrendForce data in the semiconductor industry, in the fourth quarter of last year, Samsung Electronics and SK Hynix led US-based Micron and Western Digital by a significant margin in terms of DRAM and NAND market share. In the highly sought-after High Bandwidth Memory (HBM) segment, media reports indicate that SK Hynix holds over 50% of the market share, with Samsung Electronics coming in second, and Micron ranked third.

However, SK Hynix's current market capitalization is less than 450 billion US dollars, lower than Micron, which has a smaller market share.

In the short term, there is still strong certainty in the memory sector; focus on opportunities within the equipment segment.

Despite market concerns about significant capacity releases by 2027, the severe imbalance between memory supply and demand will continue at least until then. This quarter, Micron signed its first five-year strategic cooperation contract (SCA) and stated that it can only meet 50% to two-thirds of some customers' demands in the medium term. The demand for NAND will remain in short supply in the foreseeable future.

In response to this demand, memory manufacturers like Micron will significantly increase their related equipment expenditures, particularly focusing on high-spec $ASML Holding (ASML.US)$ EUV lithography machines at the 1-delta node.

Summary

Overall, the short-term earnings visibility for the memory sector remains one of the strongest. However, the highly concentrated market continues to speculate on the turning point of supply and demand, so the memory sector may experience significant volatility.

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