SK Hynix (OTC:HXSCF) shares soared over 9% on Thursday following the commencement of mass production of their latest high-bandwidth memory chips.

What Happened: The South Korean company has introduced the HBM3E chips, which feature 12 layers and offer 50% more capacity than the previous eight-layer versions.

This development positions SK Hynix ahead in the competitive race to meet the growing demand driven by artificial intelligence advancements.

The company, a primary supplier to NVIDIA Corp (NASDAQ:NVDA), plans to deliver these advanced chips to unnamed customers by the end of the year.

Samsung Electronics (OTC:SSNLF) had previously announced in July that it would supply its HBM3E 12-high units to customers in the latter half of this year. Meanwhile, Micron Technology Inc (NASDAQ:MU) disclosed earlier this month that it is shipping production-capable HBM3E 12-high units to key industry partners for qualification.

See Also: Micron Q4 Earnings: Revenue, EPS Beat On ‘Robust AI Demand,’ Company Sees ‘Significantly Improved’ Profitability Ahead, Shares Surge

Why It Matters: In recent months, SK Hynix has experienced significant fluctuations in its stock price. Last week, the company’s shares dropped to their lowest level since February after Morgan Stanley downgraded the stock, citing deteriorating memory conditions. This downgrade slashed the target price to 120,000 won from 260,000 won.

Despite this, SK Hynix has been riding a wave of optimism driven by the AI boom. In July, Goldman Sachs and Citigroup predicted further growth for the company, driven by high demand for AI and positive earnings forecasts. Goldman Sachs raised its stock-price target to 290,000 won, while Citigroup increased its prediction to 350,000 won.

Additionally, SK Group, the parent company of SK Hynix, announced a massive $56 billion investment in AI and semiconductor technology by 2026. This investment aims to bolster the company’s supply chains for emerging technologies, including high-bandwidth memory chips.

Price Action: SK Hynix is currently trading at 180,100 won, with a surge of 8.95% on Thursday. The stock has gained 26.47% year-to-date, according to data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.