Shares in South Korean chipmaker SK Hynix extended gains to hit a more than 2-decade high on Tuesday, following reports over the weekend that SK Group plans to build the country’s largest AI data center.

SK Hynix shares, which have surged almost 50% so far this year on the back of an AI boom, were up nearly 3%, following gains on Monday.

The company’s parent, SK Group, plans to build the AI data center in partnership with Amazon Web Services in Ulsan, according to domestic media. SK Telecom and SK Broadband are reportedly leading the initiative, with support from other affiliates, including SK Hynix.

SK Hynix is a leading supplier of dynamic random access memory or DRAM — a type of semiconductor memory found in PCs, workstations and servers that is used to store data and program code.

The company’s earnings outlook has strengthened amid a recent uptick in legacy DRAM pricing, MS Hwang, research director at Counterpoint Research told CNBC.

“Notably, Morgan Stanley — historically bearish on the company — has revised its earnings estimates upward on SK Hynix,” he added.

The company’s DRAM rival, Samsung, was also trading up 4% on Tuesday. However, it’s growth has fallen behind that of SK Hynix.

On Friday, Samsung Electronics’ market cap reportedly slid to a 9-year low of 345.1 trillion won ($252 billion) as the chipmaker struggles to capitalize on AI-led demand.

SK Hynix, on the other hand, has become a leader in high bandwidth memory — a type of DRAM used in artificial intelligence servers — supplying to clients such as AI behemoth Nvidia.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved