Minotaur Global Opportunities Fund on SK hynix Inc.
Thesis
Minotaur's memory thesis is that AI systems require rapidly growing amounts of memory while demand is outrunning available supply. Meaningful new industry capacity is not expected before 2027, and customer behavior has shifted toward multi-year supply agreements, which the fund believes can extend the cycle beyond a normal short memory boom. After SK hynix fell more than half from its June peak despite record results, the Seoul-listed shares traded at roughly 3x 2027 consensus earnings, which Minotaur viewed as pricing in too short and sharp a cycle. The fund kept SK hynix as its highest-conviction memory position and argues that no thesis-breaking signal has appeared: capex is rising, DRAM shipment guidance is up, gross margin remains above its concern threshold, and industry shortages may persist into 2028.
“we think this cycle runs longer and stronger than a typical memory cycle”
Key risks
- A hyperscaler capex cut would break the memory thesis.
- An inventory build at a memory supplier would undermine the supply-tightness thesis.
- Demand normalisation in AI and server channels would weaken the expected cycle.
- Multi-year contracted pricing can cap upside during periods of sharply rising spot prices.