Outperforming 96% of peers, betting on SK Hynix: Tight supply boosts AI storage chips, easy to hold for the long term.

Global Technology Fund Janus Henderson Investors recently announced that its Global Technology Leaders Fund will focus on holding stocks of South Korean memory chip manufacturer SK Hynix, betting on the tightening global high-bandwidth memory chip supply to further enhance the profitability of this artificial intelligence (AI) memory chip manufacturer. Over the past year, SK Hynix's stock price has risen by approximately 1000%, becoming one of the benchmarks for AI industry investment. Dominance in the high-bandwidth memory chip market highlighted Co-portfolio manager Richard Clode pointed out that SK Hynix holds a 57% share in the global high-bandwidth memory chip (HBM) market, much higher than competitors Samsung Electronics (22%) and Micron Technology, Inc. (21%), giving the company a strong support for future profit growth. Clode stated, "Most people believe that the supply shortage this year could be even more severe next year, prompting large cloud service providers to sign stringent long-term contracts, providing SK Hynix with potential profit improvement opportunities." According to Counterpoint Research data, by the fourth quarter of 2025, SK Hynix has further consolidated its leading position in the high-bandwidth memory chip market. These chips are widely used in artificial intelligence training and high-performance computing fields, and are a key component of AI infrastructure. Outstanding performance of the fund, clear allocation strategy The Janus Henderson Global Technology Leaders Fund has a size of approximately $8.3 billion, outperforming 96% of its peers this year and achieving a cumulative return of 36% over the past three years. The fund currently holds shares in Micron Technology, Inc. (MU.US) and SanDisk (SNDK.US) but Clode places more emphasis on companies focused on memory chips rather than Samsung Electronics' diversified business. He stated, "Considering the amazing profitability of these companies, their stock prices appear cheaper in the rising market, making long-term holding very easy." Compared to the P/E ratio of 27 times for the Philadelphia Semiconductor Index, SK Hynix and Samsung Electronics have a P/E ratio of about 7 times, while Micron Technology, Inc. is about 10 times, demonstrating that memory chip companies continue to maintain valuation discounts in a high-demand background. Structural changes in industry cycles and supply-demand dynamics Clode pointed out that in 2023, global chip manufacturers experienced "the most severe losses in a generation," leading to significant cuts in capital expenditure and delays in new factory construction, meaning supply recovery typically takes two to three years. Supply shortages combined with rapid growth in AI demand are causing structural changes in the cyclical nature of the memory chip industry: strong demand for high-end AI chips; tight supply leading cloud service providers to sign long-term contracts; profit margin improvements enhancing the relative attractiveness of stock prices. Clode believes that reasonable asset allocation is more important than stock selection because quality memory chip companies will benefit from overall profit levels in a tight supply market. Despite concerns about valuation bubbles in the AI industry, the structural advantages of memory chip companies continue to provide long-term support. Clode emphasized that companies focused on high-bandwidth memory chips, like SK Hynix, have the potential for sustained profit growth amid tight supply and long-term contract guarantees, while companies with a high proportion of diversified business (such as Samsung) may face rising costs and profit pressure. As the demand for AI computing power continues to rise, the profit prospects of SK Hynix and its peers are expected to maintain high growth. For investors, the memory chip industry is presenting a unique opportunity window of "undervaluation and high profitability."