Memory Chip Makers Micron (MU) and SK Hynix (SKHY) Surge on Google's Massive Capex Increase

Key Takeaways

Table of Contents

SK Hynix ADRs surged 6.7% while Micron climbed 3.5% during Thursday’s premarket session
Alphabet increased its 2026 capital expenditure guidance to a range of $195B–$205B from $180B–$190B previously
The two companies are major providers of high-bandwidth memory chips for AI infrastructure
The ADR conversion ceiling of 2.5% has been reached for SK Hynix, limiting U.S. share availability
During Tesla’s earnings discussion, Elon Musk specifically acknowledged Micron for delivering chip supply on favorable terms

Alphabet unveiled its quarterly results Wednesday evening, delivering news that sent memory semiconductor manufacturers sharply higher the following morning.

Shares of Micron (MU) advanced 3.5% before the opening bell. SK Hynix ADRs (SKHY) surged 6.7%. The gains followed Google’s parent company’s decision to increase its projected 2026 capital spending to a range of $195 billion to $205 billion — significantly above the previous estimate of $180 billion to $190 billion.

Micron Technology, Inc., MU

This substantial increase in infrastructure investment translates directly into heightened demand for the semiconductor products both companies manufacture.

Chief Financial Officer Anat Ashkenazi indicated the elevated spending reflects accelerated capacity deployment to satisfy customer requirements. Simply put: Google is expanding its operations at a faster pace and requires additional equipment to support that growth.

AI-focused servers depend extensively on high-bandwidth memory, commonly known as HBM. With Alphabet ramping up its infrastructure buildout, both Micron and SK Hynix are positioned to capture significant demand as leading HBM providers globally.

The upward movement is especially notable considering recent headwinds for both securities. Micron has declined approximately 9% during the past month. SK Hynix’s shares trading in Seoul have fallen nearly 25% in the same period, amid concerns that elevated chip pricing might prove unsustainable and that technology giants might reduce capital outlays.

Alphabet’s Wednesday disclosure significantly alleviated those worries, at least temporarily.

ADR Supply Constraints Impact SK Hynix Trading

SK Hynix launched its U.S. listing on July 10, and has quickly encountered an uncommon limitation. The company has reached the 2.5% threshold for converting Seoul-listed shares into American Depositary Receipts. This effectively halts additional supply from entering the U.S. marketplace temporarily.

When demand remains robust while available inventory is restricted, price movements typically accelerate. This dynamic partially explains why SK Hynix’s 6.7% premarket gain exceeded Micron’s advance.

The company continues making substantial manufacturing investments. Its board recently authorized a ₩7.09 trillion capital allocation for an advanced packaging plant in Cheongju. SK Hynix is scheduled to announce Q2 financial results on July 29.

Tesla CEO Highlights Micron’s Role

Micron received additional attention from an unexpected quarter. During Tesla’s quarterly earnings discussion, Elon Musk specifically acknowledged Micron for securing Tesla a substantial memory chip allocation at reasonable pricing — while characterizing broader memory market pricing as “insane.”

The remark highlighted just how constrained supply has become throughout the sector. Companies are working aggressively to secure chip inventory, and Micron stands to gain from both increased volumes and favorable pricing dynamics as it scales production of its latest memory technologies.

According to TipRanks analytics, Micron holds a Strong Buy consensus among analysts, with 29 Buy recommendations and one Hold issued within the last three months. The mean price target stands at $1,569.29, suggesting approximately 64% potential appreciation from present levels.

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