Samsung: Larger in Both Markets, Late to the One That PaidNarrow moat
SK hynix (SKHY) — moat facet
The largest, best-capitalised and most vertically integrated participant in this industry lost a product generation -- which is the strongest available evidence that SK hynix's own lead is losable.
Samsung is bigger than SK hynix in DRAM, bigger in NAND, and owns a leading-edge foundry and an advanced packaging business besides. On paper it is the more complete company by some distance.
It also arrived late to high-bandwidth memory, and that single lapse has defined both companies' last three years. SK hynix's HBM share was 56.4% in the first quarter of 20261, and the profits attached to it are why a company that is second in its two markets earned a 76% operating margin in the second quarter2.
The lesson runs both ways, and the second direction is the one an owner should sit with. If the largest, best-capitalised, most vertically integrated participant in this industry can lose a product generation, then a lead in this industry is losable — including this one. Samsung did not fail because it lacked money or engineers. It made a technical call that turned out badly at exactly the wrong moment.
Samsung's structural advantage is integration: memory, logic, foundry and packaging inside one company, which in principle lets it design a stack nobody else can assemble. SK hynix's answer has been to partner rather than own, which works precisely as long as the partner stays neutral.
What would falsify the current position is straightforward and would be visible early: Samsung qualifying at parity into the same accelerator programs on the same schedule. Share follows qualification by a year or more.
Samsung is closing the HBM gap it opened, and it does so with its own foundry, its own packaging and a memory division inside a far larger balance sheet.
Samsung is larger in DRAM and NAND and came late to HBM, but it gained most from rising conventional prices. Samsung growing faster for several quarters would show scale winning the price cycle while SK hynix holds HBM.
Source: TrendForce DRAM ranking, Q1 2026 ↗- Third-party estimateSK hynix's HBM share was 56.4% in the first quarter of 2026.SK hynix Inc., Form 424B4 prospectus for its Nasdaq offering (SEC, CIK 2120882) — FY2025 revenue W 97,147bn, cost of sales W 38,456bn, gross profit W 58,691bn, S&A W 5,019bn, R&D W 6,466bn and profit for the year W 42,948bn, against FY2024 revenue W 66,193bn / profit W 19,797bn and FY2023 revenue W 32,766bn / cost of sales W 33,299bn / gross loss W 533bn / loss for the year W 9,138bn; Q1 2026 revenue W 52,576bn, gross profit W 41,679bn, profit W 40,346bn. IDC market shares for Q1 2026: second in DRAM at 29.1%, first in HBM at 56.4%, second in NAND at 18.5%, with the three DRAM producers together above 90% of revenue. DRAM products were 77.1% of total sales in 2025 and 77.3% in Q1 2026; NAND 21.3% and 22.0%. Competitors named: Samsung Electronics, Micron Technology and CXMT in DRAM; Samsung Electronics, Kioxia, Micron Technology and Sandisk in NAND; competitive factors listed as 'pricing; manufacturing costs, yields and product availability; product performance, quality and reliability'. First to develop HBM using TSV packaging, commercialised HBM3E in 2024 and developed HBM4 in 2025; HBM carried a per-gigabyte price premium of more than five times traditional DRAM in 2025. M15X cleanroom opened October 2025 with wafer input from Q1 2026; Yongin construction began February 2025 with the first fab's phase-one cleanroom expected Q1 2027; an advanced packaging plant (P&T7) is under construction in Cheongju and one is planned in Indiana for the second half of 2028. Intel's NAND business cost US$6.6bn in December 2021 plus US$2.2bn in March 2025, operated as Solidigm; NAND mass production is transitioning from 176-layer to 238- and 321-layer technologies. Gartner forecasts DRAM revenue of US$143bn in 2025 rising to US$401bn in 2027, HBM US$33bn to US$86bn and NAND US$68bn to US$341bn. A substantial portion of sales is attributable to a limited number of customers located in the United States and China; the two largest were 14.8% and 12.4% of revenue in Q1 2026 and the largest was 23.9% of revenue in 2025. The offering was 177,900,000 ADSs at US$149.00, each ADS one-tenth of a common share, representing 17,790,000 shares against 712,702,365 outstanding; Baillie Gifford, Coatue and Situational Awareness Partners indicated non-binding interest of up to US$7bn. — FY2023-FY2025 and Q1 2026 · publ. 2026-07-10 · source ↗
- ReportedAn operating margin near 76% in the second quarter of 2026.SK hynix Inc., preliminary results of operations for the second quarter of 2026 (SEC Form 6-K, 29 July 2026) — revenue W 79,318,746 million, up 50.9% on Q1 2026's W 52,576,287 million and 256.8% on Q2 2025's W 22,231,952 million; operating profit W 60,542,608 million, up 61.0% sequentially and 557.2% year on year, an operating margin of about 76%; profit before income tax W 122,708,355 million; profit for the period W 93,922,593 million. First-half 2026 revenue W 131,895,033 million, operating profit W 98,152,891 million and profit W 134,268,502 million. Prepared on a consolidated basis under K-IFRS and unaudited. — Q2 2026 (quarter ended 30 June 2026) · publ. 2026-07-29 · source ↗