Profit Prediction Engine

What the ledger proves — this is why the defaults aren't a mood: (1) 2026-28 tightness is physics. No greenfield fab can reach volume before H2 2028, and every HBM wafer eats ~3× the capacity of a commodity wafer — the shortage is structural, which is why Scenarios A and B share the same 2027-28 chip-growth numbers. (2) The genuine fork is 2029-31, when M17, Yongin 2-3, Samsung's national fabs and CXMT's IPO-funded lines all switch on together — now with ₩800T of state money behind doubling capacity. The materials layer (new): below the chip sits a second set of bottlenecks — T-glass cloth (Nittobo, ~90% share) and advanced copper foil (Mitsui) that every AI substrate and server board needs. These don't stop SK making chips; they cap how many systems the world can assemble per quarter. In a shortage that's margin-supportive (scarcity everywhere = pricing power everywhere, feeding the uncapped LTAs) while trimming the ceiling on unit growth. Their relief arrives mid-2027 — conveniently right when our 2027-28 volume ramp needs the pipe to widen. (3) Photonics is a demand lane, not a threat: TSMC's 30× optical-interconnect ramp (COUPE) un-blocks the wires between chips from 2027 — and faster wires expose the memory bottleneck harder. It also makes optically-pooled memory racks practical, which adds HBM and SOCAMM-class demand on top of local stacks. Three pipe-widening events now converge on 2027: T-glass relief, CoWoS→200K, COUPE ramp. Fact-weighted scenario odds: ~25% A · 50% B · 25% C. The LTA leg just hardened: SK's new contracts have floors but no price caps (unique among the big three — Micron caps at Q2-26 levels) plus 10-30% prepayments. Let the Jul 29 earnings-call LTA detail move the weighting further — not headlines.

Street cross-check (Jul 9): three independent answers to "what is this worth" — this engine's 2028 base case ₩5.84M (bits × prices × costs, 10× multiple) · SimplyWall.st's discounted-cash-flow ₩5.53M (their model, their assumptions) · 37 analysts' 12-month average target ₩3.21M. The first two were built completely separately and land within 6% of each other — that convergence is the anchor. The analyst number isn't wrong, it's answering a different question (12 months out, not 2028) with LOW agreement (spread >15%). Street forward EPS ₩355.65K vs engine 2027 ₩434K — engine ~20% above street, the size of the uncapped-LTA effect the street hasn't fully modelled yet. Debut-day validation: LSEG's analyst poll now puts 2026 revenue at ~$235B ≈ ₩335-355T — squarely on this engine's ₩335T base case. And the ADR adds a live cross-check: SKHY's first US close ($168.01) values the same share at ~₩2.53M — a 16% premium the American market is paying today over the Seoul price this page conservatively uses.

The evidence stack got too tall to keep below the base: Kwak on the record ("demand above supply beyond 2030"), Nvidia's ≥$1T cumulative Blackwell+Rubin orders through 2027, TSMC's CoWoS and N3 sold out with lead times into 2027, ASML's 2027 book effectively full with large 2028 orders already placed, Gerstner positioned "durable through 2029," Baker's 30-40%-of-capex call, MS's memory wall, and Citrini's 28.7-exabyte 2030 supply gap even if every announced fab including China's comes online. Accordingly: the engine's base now runs on the printed-price extrapolator (₩357T '26 / ~₩543T '27), the prior hand-set lines (₩335T / ₩484T) become the conservative floor, and the 2029-31 oversupply wave moves fully to the risk case. The discipline stays: this recentering dies — mechanically, back to the floor — on any of: a first hyperscaler capex cut, the CoWoS supply-demand gap closing below ~5%, or two consecutive quarters of DRAM contract price declines.

Capacity is the binder, and that's the point. The chain above is demand. SK's supply is gated by TSV/MR-MUF packaging (P&T7 arrives late-2027) and was sold out for 2026 before the year began — Kwak's on-record call is that 2027 is the worst supply year in the industry's history. When chain-demand exceeds SK's buildable bits, the surplus doesn't vanish — it shows up as price (the $/Gb slider), which is exactly Scenario B's mechanism. Reconciliation with the engine, stated honestly: at defaults this chain yields ~₩130T of 2027 HBM-stack-only revenue; the engine's HBM line runs hotter because it also carries what the chain excludes — SOCAMM2, custom base-die value, and the price upside if Goldman's $5/Gb prints (move the price slider to 5 and watch the gap close). Two independent paths, one corridor. Cross-check from the demand side: Morgan Stanley's Moore, after meeting Jensen — Nvidia's constraint list starts with "memory."

What compounding the tape shows: at the printed sequence with realistic LTA damping, the engine's hand-set lines (₩335T '26 / ₩484T '27) are conservative, not aggressive — the prints already run ahead of them. If the tape merely holds, the engine is under-clubbed; if the tape mean-reverts, the engine is roughly right. Falsifier: two consecutive quarters of QoQ contract declines before end-2027.

Three transmission lanes, one subtlety. Lane 1, demand: ASML→TSMC/Intel logic tools become AI accelerators that must attach HBM (logic +25%, EUV +45%). Lane 2, SK's supply: the +75% memory-tool surge is SK/Samsung/Micron's 2027-28 bit capacity being installed now. Lane 3, telemetry: 2027 effectively sold out and 2028 orders already large — the Vahdat prediction row's capex telemetry, printing a year early. The subtlety Dassen handed us: rising EUV layers per wafer means tool spend converts to bits sub-linearly — a chunk of that +75% buys intensity, not volume. Cost-per-bit rises industry-wide, which is a structural floor under pricing: the supply wave of 2027-28 arrives pre-throttled by its own lithography bill. Discipline, enforced by physics and Veldhoven's order book.

Read the machine honestly. Under the plain Vahdat defaults the story is not "SK grows 1000×" — it's rationing: most demanded bits go unserved, factories run flat-out, and price does the rationing work. That is Fortune's "stage two of AI, where the bottlenecks are physical" — power, cooling, build time — which is this site's thesis wearing Google's badge. Note the built-in tension: Vahdat's "same cost, same power" goal is literally a bet against memory pricing — Google wants the efficiency sponge to eat the curve. SK's upside case is the sponge failing to keep pace while Jevons converts every efficiency win into even more demand (the 1000× is Jevons in action — and Kimi K3 just staged the live demo: open-weight frontier model, maker's GPUs exhausted in 48 hours, ~1.1TB of HBM per serving instance; Baker's Jul 17 margin-waterfall thread is the argument in one screenshot). Physical telemetry that must appear if this curve is real: hyperscaler capex through $700B/yr by 2027 (McKinsey: $5.3T of AI datacenter capex by 2030) · tens of GW newly energized per year · ASML EUV book · Ironwood-class TPU volumes (each carries 192GB of HBM — Google's curve is an SK order) · P&T7/M15X on schedule. What kills it: efficiency >4×/yr (demand-in-bits flattens), AGI arriving late into the 2029-31 capacity wave (glut — bear row 7), power/capital ceilings, or stacked-LPDDR/HBF stealing the inference tier (bear row 11).

How to read it: at defaults, ~$29B of reachable new demand × 5 ÷ (75% float × $1.04T) ≈ +19% — almost exactly the 16% premium the ADR printed on day one. The American market has, in one session, roughly pre-paid the flows this simulator expects. Flows change the price path and the multiple; they never change earnings — the two engines of return are independent, which is why this card and the profit engine above are kept separate. Tokens are optionality, not flow: $1.18M of day-one volume rounds to zero, but the rails now exist and never close. Deep structure in one line: the ETFs are a variance amplifier, the tokens a float sponge, and MaaS a valuation-basin option — none of them change a single wafer. The MaaS wildcard sits outside both engines: if Chey's "memory as a service" ever gets a price and a customer, it attacks the 10× multiple ceiling itself — the one input here that's deliberately conservative.