TLDR
- SK Hynix stock rose 3% in premarket trading Wednesday, bouncing back from a 9% drop over the prior five sessions
- The company’s union approved a revised profit-sharing deal, raising the cash portion of bonuses from 40% to 50%
- SK Hynix is reportedly in early talks with Intel about using space at its planned Ohio semiconductor facility
- Intel (INTC) stock also gained more than 5% in premarket as news of the Ohio fab talks broke
- Wall Street rates SKHY a Strong Buy with an average price target of $249.70, implying more than 40% upside
SK Hynix (SKHY) stock was trading at $180.93, up 3.49% in premarket Wednesday, bouncing back after a 9% slide over the prior five sessions.
The recovery came after the company’s labor union approved a revised profit-sharing agreement, easing concerns about possible production disruptions.
Under the new deal, half of profit-sharing bonuses will be paid in cash and half in company stock. That replaces an earlier plan that offered only 40% in cash.
About 57% of union members voted to approve the revised wage and collective bargaining deal.
The deal wasn’t easy to land. Union members had rejected an earlier proposal in August, with just over 50% voting against it. This round took another two weeks of talks.
“We thank the labour union and our employees for working with us throughout this challenging process,” SK Hynix said in a statement.
The agreement also removes the cap on profit-sharing bonuses entirely. SK Hynix will set aside 10% of its annual operating profit for employee bonuses each year for the next 10 years.
If the company reports a loss, the deal allows SK Hynix to temporarily cut employee pay by 3%, with full pay restored once business turns around.
South Korean-listed shares of SK Hynix gained 4% on Wednesday as well.
Intel Ohio Talks Put SKHY Back in Focus
Reuters reported Wednesday that SK Hynix is in early-stage talks with Intel about using space at Intel’s planned semiconductor hub in Ohio.
One option would have SK Hynix lease part of Intel’s Ohio facility. Another could involve a joint venture that includes major cloud providers looking to secure memory chip supply.
Both companies said no decisions have been made and the talks remain exploratory.
Intel’s Ohio project has already faced delays. It initially targeted production in 2025, but the two planned factories are now expected to complete in 2030 and 2031.
Any deal involving advanced HBM or DRAM technology could also require review from the South Korean government, which classifies those technologies as sensitive national assets.
Intel (INTC) stock rose more than 5% in premarket, trading at $102.03.
What Analysts Think of SKHY
Wall Street rates SKHY a Strong Buy, based on 11 Buy ratings assigned over the past three months.
The average price target sits at $249.70, which would represent more than 40% upside from current premarket levels.
JPMorgan started coverage with an Overweight rating and a $245 price target on September 10. Needham held its Buy rating and raised its target to $220 on August 24. Wolfe Research began coverage with an Outperform rating and a $200 target on August 4.
SK Hynix also approved a ₩40 trillion share buyback in August.
SK Hynix (SKHY) stock was at $180.93 in premarket trading Wednesday, according to Benzinga Pro data.
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