The Motley Fool article’s author says they would buy SK Hynix over Micron and Sandisk, citing its lower valuation: about six times forecast 2027 earnings, versus seven for Micron and nine for Sandisk. All three remain exposed to cyclical memory prices.
Recent results show how strongly prices lifted sales. Micron’s fiscal third-quarter revenue rose 74% sequentially to $41.5 billion; its filing attributed the increase chiefly to DRAM prices, up in the low-60% range, while DRAM volume grew only a low-single-digit percentage. Sandisk’s fiscal fourth-quarter revenue rose 51% sequentially to $8.97 billion, with management attributing about two-thirds of the increase to pricing. SK Hynix’s second-quarter revenue rose 257% year over year to about 79 trillion won, and operating profit climbed 557% to about 60.5 trillion won.
Micron’s multi-year take-or-pay agreements require customers to pay for set volumes even if they do not take them; most have fixed prices or price floors and ceilings. SK Hynix has long-term agreements with around 10 customers. Sandisk’s long-term supply deals have financial guarantees but have not faced a falling market. Such agreements may not prevent a downturn: when memory prices collapsed in fiscal 2023, Micron’s revenue halved to $15.5 billion and it posted a $5.83 billion net loss.
