SK hynix posted its biggest-ever quarterly results in the second quarter this year on the back of expanding sales of high-performance memory for artificial intelligence (AI) servers.
SK hynix disclosed on the 29th that it logged revenue of 79.3187 trillion won and operating profit of 60.5426 trillion won in the second quarter. Both revenue and operating profit were the highest on record for a quarter.
Revenue rose 256.8% from a year earlier and 50.9% from the previous quarter. Operating profit increased 557.2% year over year and 61.0% quarter over quarter. The operating margin was 76%, up 4 percentage points from 72% in the prior quarter.
Still, the results fell short of market expectations despite being the highest ever. The second-quarter consensus compiled by FnGuide was revenue of 83.9194 trillion won and operating profit of 64.6941 trillion won. Actual revenue and operating profit were below the consensus by 4.6007 trillion won (5.5%) and 4.1515 trillion won (6.4%), respectively.
Net profit was 93.9226 trillion won, up 1,242.5% from a year earlier and 132.8% from the previous quarter. The net margin was tallied at 118%. Cumulative first-half revenue was 131.8950 trillion won, topping 100 trillion won for the first time. Cumulative operating profit was 98.1529 trillion won, and net profit was 134.2685 trillion won.
SK hynix said stronger demand driven by expanding AI infrastructure investment and increased sales of high value-added products led the earnings improvement. With prices of DRAM and NAND flash jumping again from the previous quarter, sales of high bandwidth memory (HBM), DRAM for AI servers, and enterprise solid-state drives (eSSD) increased.
An SK hynix official said, "Both DRAM and NAND saw a steep price increase following the previous quarter," and added, "We boosted sales centered on high value-added products such as HBM, DRAM for AI servers, and eSSD to generate the best profitability."
Financial capacity also expanded. Cash and cash equivalents at the end of the second quarter came to 88 trillion won, up 33.6 trillion won from the end of the previous quarter. Borrowings stood at 18.6 trillion won, down 700 billion won over the same period. Net cash, which subtracts borrowings from cash and cash equivalents, increased to 69.4 trillion won.
◇ Long-term contracts with about 10 customers… HBM4 production to ramp up in the second half
SK hynix analyzed that as AI evolves into an agent that handles complex tasks, demand is rising not only for AI memory but also for general memory. The company believes the trend of increasing memory demand will continue as major big tech corporations expand infrastructure investment based on revenue generated from AI services.
SK hynix has wrapped up long-term supply agreement (LTA) negotiations with about 10 customers. It is also discussing additional contracts with key industry customers. Through multi-year deals, the strategy is to enhance predictability in production and sales plans and secure mid- to long-term business stability.
HBM4, the sixth-generation high bandwidth memory, began mass-production shipments in the second quarter. From the second half, the company plans to ramp up output in earnest. An SK hynix official said, "HBM4 delivers the operating speeds customers need while achieving industry-leading power efficiency and cost competitiveness, proving differentiated technological competitiveness."
HBM4E, the successor to HBM4, completed sample shipments to customers in the first half of this year. SK hynix said it applied the optimal process with technological maturity and mass-production stability to HBM4E. In the HBM market, the company plans to maintain leadership by leveraging comprehensive competitiveness across quality, Production yield, stable supply capability, cost, and performance.
Sales of SOCAMM2, a next-generation memory module that applies low-power mobile DRAM to AI server environments to improve power and space efficiency, also grew sharply in the second quarter. SK hynix said it has also begun in earnest to supply products built on the 10-nanometer-class sixth-generation (1c) process.
◇ Expanding production of 321-layer NAND… M15X mass-production timeline moved up
In NAND, the company is accelerating the transition to advanced nodes. The 321-layer product already accounts for the largest share of total NAND output. The company plans to expand the 321-layer product to about 50% of domestic NAND production capacity by year-end.
It is also investing to expand capacity. SK hynix is moving up the mass-production schedule at M15X in Cheongju, North Chungcheong Province, while investing so it can quickly scale capacity after opening the clean room at the first-phase fab of the semiconductor cluster in Yongin, Gyeonggi Province, in early 2027.
Mid- to long-term investments, including the advanced packaging plant P&T7, the M17 NAND production base, and the creation of a new semiconductor cluster, will also proceed in stages, considering customer demand and investment efficiency. The company judges that the ability to deliver required volumes on time, when customer demand exceeds supply capacity, is emerging as a key competitive edge. While responding to mid- to long-term demand growth, it plans to maintain its capital expenditure principle (CapEx Discipline).