Korean memory chip company SK Hynix (NASDAQ: SKHY) is one of the major players in this industry and a competitor to Micron Technology (NASDAQ: MU). So, how can its announcement of huge news affect Micron? Well, it has to deal with the state of the industry that these two operate in.
There isn’t a ton that separates one memory chip producer from another, and the products are fairly commoditized. As a result, chip prices are highly driven by supply and demand laws.
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Right now, demand is high, and supply is low, so prices are soaring. While times are good right now, the market is worried that demand will eventually soften, and the companies in this space will see their businesses collapse as a result. However, SK Hynix just pushed that date out further.
During its most recent earnings report, SK Hynix noted that its DRAM and HBM (high bandwidth memory, the type that’s utilized in AI computing units) were sold out through 2029. That’s big news, and most likely the same will happen to Micron as well.
As a result, demand for memory chips will remain high, which should boost Micron’s stock. The market hasn’t priced this in yet, so now is the perfect time to buy.
Micron has major expansion plans in the works
Micron has been vocal about market conditions, but that hasn’t been reflected in the company’s stock price. Micron told investors during its most recent quarter that market conditions would worsen in 2027 and 2028 for its clients compared with 2026. If you’ve followed the memory chip market during 2026, that seems like an unfathomable statement, but it’s where the industry is.
SK Hynix’s news that 2029 could be just as bad further extends the bull case for memory chipmakers. Furthermore, if SK Hynix is already announcing that it has sold out of capacity three years from now, high AI demand will likely continue into 2030 and 2031. As a result, there could be several years’ worth of strong growth ahead for anyone involved in the memory chip space.
However, Micron has another boost up its sleeve. The company is building several new production facilities, including one scheduled to open in mid-2027, and another in late 2028 in the U.S. Internationally, Micron has two more facilities scheduled to open in 2027, and another two in 2028. So, Micron’s total production capacity should be significantly expanded over the next two years, and today’s market conditions will likely persist, keeping memory chip prices high.
