The Cheapest AI Bet: HBM Dominance Makes Samsung & SK Hynix Must-Buy Stocks ​

HBM Dominance: The Real Reason US Investors Can’t Ignore Korea’s Chip Giants

Korea’s chip giants SK hynix and Samsung dominate the HBM market, powering NVIDIA GPUs and AI hyperscalers. Here’s why undervaluation + Uptober make them a must-watch for US investors.

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Part I. Korea: The Unsung Hero of the AI Supply Chain

1) The Beating Heart of the AI Era — Strategic Value of HBM

Since the Fourth Industrial Revolution, artificial intelligence has evolved beyond a technological trend to become a core pillar of national competitiveness. The rise of generative AI models like ChatGPT has triggered explosive demand for high-performance semiconductors capable of supporting AI training and inference.

The key point: no matter how powerful NVIDIA’s GPUs or AMD’s accelerators may be, they are essentially useless without high-performance memory. Without rapid data throughput, even the fastest GPUs face bottlenecks.

The solution is HBM (High Bandwidth Memory). Unlike traditional DRAM, HBM stacks multiple memory dies vertically and interconnects them with Through-Silicon Via (TSV) technology. This architecture dramatically boosts bandwidth and efficiency.

Bandwidth: 3–5x greater than conventional server DRAM

Power efficiency: More than 40% better per operation

Performance example: NVIDIA’s H100 GPU with HBM3 achieves 819 GB/s in memory throughput — equivalent to streaming over 20 Blu-ray movies in a single second.


As AI models grow from billions to hundreds of billions of parameters, HBM is no longer optional — it is the indispensable heartbeat of the AI era.


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2) A Duopoly: SK hynix and Samsung Electronics

Korea’s unique position in the AI supply chain becomes evident when looking at the structure of the HBM market. The global supply of HBM is controlled by just a few companies — overwhelmingly by SK hynix and Samsung Electronics.

Global HBM market share (2024, TrendForce)

SK hynix: 53%

Samsung Electronics: 38%

Micron: 9%



SK hynix has secured the top spot by exclusively supplying HBM3 and HBM3E for NVIDIA’s H100 and H200 GPUs. These GPUs are the backbone of today’s AI training clusters, making SK hynix an essential player in the ecosystem.

Samsung, although slower to ramp up HBM3E, is now racing ahead with HBM4 development and has expanded capacity at its Pyeongtaek campus in Korea and Austin, Texas. Its strategy is clear: catch up now, lead in the future.

This is not just about corporate rivalry. Regardless of how advanced US or European GPU designs may become, their AI servers cannot be built or deployed without Korean HBM. In short, Korean memory makers are irreplaceable in the global AI supply chain.


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3) Explosive Demand from Cloud Hyperscalers

The outlook is even brighter. Hyperscalers — AWS, Microsoft Azure, and Google Cloud — are committing record levels of CapEx to expand their AI infrastructure.

AWS: More than KRW 80 trillion (~USD 60B) in AI-related investment through 2025

Microsoft Azure: At least KRW 60 trillion (~USD 45B) in AI data centers, boosted by its OpenAI partnership

Google Cloud: Over KRW 40 trillion (~USD 30B) in TPU and GPU clusters


All three share one goal: maximize AI training and inference speed. And that requires massive quantities of HBM.

HBM market size: USD 5B in 2023 → USD 12B+ in 2025 (CAGR ~35%, TrendForce)

SK hynix operating profit (2025 consensus): Over KRW 14T, +80% YoY

Samsung Electronics semiconductor profit (2025 outlook): KRW 20T+, ~2x growth


Simply put, hyperscaler CapEx flows directly into Korea’s HBM champions. As AI adoption accelerates, Korean chipmakers are set to remain at the very center of the supply chain.


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📌 Key Takeaways, Part I

1. HBM is the invisible engine behind GPUs — the heartbeat of AI.


2. SK hynix and Samsung control over 90% of global HBM supply, effectively acting as the valves of the AI industry.


3. Hyperscaler AI CapEx will translate into a direct earnings upgrade for Korean chipmakers.




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Part II. Value-Up Meets Technological Dominance

1) The Reality of Korea Discount

Despite their global dominance, Korean chipmakers continue to suffer from the “Korea Discount” — chronically lower valuations compared to peers. This reflects factors such as governance opacity, geopolitical risks (North Korea, China), low dividend payout ratios, and limited accessibility for foreign investors.

Price-to-book ratio (P/B)

Samsung Electronics: ~1.4x

SK hynix: ~1.8x

Micron: ~2.5x

Broadcom: 8x+



Broadcom, a fabless player with AI networking exposure, trades at premium multiples. Yet Samsung and SK hynix, who dominate the HBM market, remain in undervalued territory.

For US investors, this creates a rare dual appeal: growth + undervaluation.


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2) The Korea Value-Up Program (KVP)

To address structural undervaluation, the Korean government launched the Korea Value-Up Program (KVP) in 2024. Its core measures:

1. Share buybacks — companies purchasing and canceling their own stock


2. Higher dividend payouts — raising payout ratios toward global standards of 30–40%


3. Governance reforms — more transparent boards, stronger minority shareholder rights



This is more than a short-term boost. It is a structural catalyst designed to reduce the “Korea Discount” across the entire market.

Already, companies are responding:

Samsung Electronics has doubled the scale of its buyback and cancellation program.

SK hynix has raised its dividend payout policy, signaling stronger shareholder returns.



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3) Global Index Inclusion as a Structural Catalyst

KVP also ties into Korea’s longstanding ambition: MSCI Developed Market Index inclusion. Should Korea join, passive inflows from global ETFs and pension funds would automatically raise Korean blue-chip weights.

For instance, ETFs like the MSCI World ETF or iShares MSCI World would be forced to increase allocations to Samsung and SK hynix. This means not just tactical inflows, but structural long-term foreign capital.

Thus, KVP is more than a policy experiment — it could become the trigger that elevates Korean equities to true global benchmarks.


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📌 Key Takeaways, Part II

1. Korean chipmakers remain undervalued despite global leadership.


2. The Value-Up Program directly targets the Korea Discount via buybacks, dividends, and governance reform.


3. MSCI inclusion could structurally boost foreign inflows, making Korea’s blue chips unavoidable for global portfolios.




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Part III. October Catalysts — Foreign Flows and FX

1) Foreign Capital Returns — Focused on AI

In September 2025, foreign investors recorded net purchases of over KRW 7T in the Korean equity market. More striking than the number was the concentration: flows went almost exclusively into AI beneficiaries.

Samsung Electronics: HBM and foundry leadership

SK hynix: Exclusive HBM3/HBM3E supplier to NVIDIA

Naver & Kakao: Cloud and AI data center exposure


This is a paradigm shift. Foreign investors no longer see Korea as merely a “cheap emerging market” — but rather as a core bet on the AI cycle.


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2) FX Dynamics — The 1,400 KRW/USD Barrier

Currency remains a critical risk.

USD/KRW above 1,400: Even with 10% equity gains, dollar-based investors can lose money once FX losses are factored in. For example, buying at 1,450 KRW/USD and exiting at 1,500 KRW/USD could erase all equity profits.

USD/KRW at 1,350: A stronger won creates a dual tailwind — equity gains + FX gains.


Markets are watching the Fed closely. Any dovish signal (pause or gradual cuts) could weaken the dollar and strengthen Asian currencies, magnifying the attractiveness of Korean equities.


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Conclusion. Uptober and the Next Leg of the AI Rally

Korea’s chip giants stand on three structural pillars:

1. HBM dominance — over 90% global share, irreplaceable in AI supply chains


2. Undervaluation + Value-Up reforms — tackling the Korea Discount head-on


3. Foreign flows + FX tailwinds — AI-focused inflows, amplified by potential won strength



October combines two catalysts: earnings season and the Fed meeting. Historically known as the “Uptober effect,” October rallies could be amplified this year by Korea’s unique positioning.

Ultimately, HBM dominance is more than a technological edge — it is the structural reason US investors cannot afford to ignore Korean semiconductors. Korea’s chip giants are no longer just regional champions; they are undervalued, indispensable players at the center of the global AI rally.


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📚 References

1. TrendForce (2024) — High Bandwidth Memory Market Outlook


2. NVIDIA (2023) — NVIDIA H100 Tensor Core GPU Architecture


3. SK hynix IR (2024 Q2) — Earnings & HBM3E supply outlook


4. Samsung Electronics (2024) — Semiconductor business briefing, Pyeongtaek & Austin expansion


5. Korea Economic Daily (Sept 2025) — “Foreign investors buy KRW 7T, focused on AI semiconductors”


6. Financial Services Commission (2024) — Korea Value-Up Program policy announcement


7. Bloomberg (Sept 2025) — “Dollar Weakens as Fed Signals Policy Shift”


8. IMF Exchange Rate Database (2025)