FnGuide SK Hynix Value Chain Index, SK Hynix, and Nvidia (Think of the Movie Godfather)
If Nvidia starts to have new orders/margin issues, it is likely to pressure SK Hynix to lower its margin assumptions as well for its HBM and other semiconductor chips.
If SK Hynix is required to lower prices/profit margins on its core semiconductor products, it will also request many of its suppliers to reduce their prices/profit margins as well.
By closely tracking some of the smaller suppliers of SK Hynix, this could potentially aid investors in their assessment of the entire Nvidia/SK Hynix/AI chip value chain.
Source: Company data, Naver Finance Consensus Estimates, FnGuide
SK Hynix (000660 KS) (market cap - 1.0 trillion won) has become a monster stock and one of the best performing large cap stocks in Asia and globally in the past five years (up 1,017%). In this insight, I take a deeper look at FnGuide SK Hynix Value Chain Index. Hyundai UNICORN SK Hynix Value Chain Active ETF (494220 KS) (market cap - 185 billion won) is based on the FnGuide SK Hynix Value Chain Index.
Most of the companies that are included in this index are suppliers of SK Hynix. The main purpose of taking a deeper look at this index is to pinpoint some of the companies that may be having some sales or margin pressure issues. If that is so, it could be one of the early warning signals for SK Hynix.
To put this on a bigger framework, NVIDIA Corp (NVDA US) is the godfather of AI hardware (aka Don Corleone), SK Hynix is like Sal Tessio (a loyal friend to Don Corleone), and the smaller companies in this SK Hynix Value Chain index are like the “Crew” that consisted of numerous “unnamed button men (soldiers) responsible for protecting Corleone interests in Brooklyn.”
Amid the biggest bull-market for the semiconductor sector led by AI chips its Godfather Nvidia, its larger partners such as SK Hynix and its smaller suppliers all have had tremendous surge in their share prices. 2026 appears to be a record breaking year for Nvidia, SK Hynix, and many of its local suppliers in Korea.
Among these companies, if Nvidia starts to have new orders/margin issues, it is likely to pressure SK Hynix to lower its margin assumptions as well for its HBM and other semiconductor chips. If SK Hynix is required to lower prices/profit margins on its core semiconductor products, it will also request many of its suppliers to reduce their prices/profit margins as well.
Given the unprecedented demand for AI chips, it remains to be seen how the next down cycle will play out. Nonetheless, by closely tracking some of the smaller suppliers of SK Hynix, this could potentially aid investors in their assessment of the entire Nvidia/SK Hynix/AI chip value chain.
In SK Hynix’s most recent quarterly earnings conference call in 1Q 2026, the company predicted that the supply-demand imbalance would not be easily resolved, anticipating that HBM demand will exceed supply for the next three years. That is a big, bold statement, especially in light of the uncertain macro, geo-political environment.
