SEOUL, KOREA - On October 31, KDB Daewoo Securities maintained its investment opinion on SK Hynix at "buy" and set the target price upward at 43,000 won from 38,000 won on the grounds that the DRAM market has entered a "goldilocks" zone.

 

KDB Daewoo Securities analyst Song Jung-ho said, "The 2014 DRAM market will see the price fluctuation shrink and major DRAM makers consistently realize huge profits."

 

"The fire at the Wuxi chip plant of SK Hynix was a blessing in disguise for the company and the industry as a whole because the fire caused the supply-demand situation in the DRAM market to be very stable. Even after the incident, moves by major chip makers to increase the capacity have been quite limited," he added.

 

Although there may be possibilities of the rising momentum for DRAM prices to dissipate after the Wuxi plant is fully repaired, he continued, it won't be any time soon for the plant to resume operation while other rival companies won't be able to increase their output quickly. The analyst said that SK Hynix' operating profit in 2014 would be 4.4 trillion won, up 11 percent from previous estimates.