SK Hynix Posts Record Q2 Operating Profit of $43.9 Billion as First-Half Revenue Tops $95.7 Billion

Second-quarter revenue reaches $57.5 billion and operating profit hits $43.9 billion

Record results driven by stronger HBM and AI server memory sales

"Big Tech customers continue to request more supply; LTAs signed with more than 10 clients"

SK Hynix posted more than $43 billion in operating profit in the second quarter, helped by rising sales of high-value memory used in artificial intelligence servers. Its operating margin reached 76%, and first-half cumulative revenue topped $72.5 billion for the first time.

The company said on July 29 that second-quarter consolidated revenue came to $57.5 billion and operating profit totaled $43.9 billion. Revenue rose 257% from a year earlier, while operating profit surged 557%. From the previous quarter, revenue increased 50.9% and operating profit climbed 61%.

Net income was $68.1 billion, with a net margin of 118%. Both quarterly revenue and operating profit were record highs. First-half cumulative revenue reached $95.7 billion, while operating profit came to $71.2 billion.

The results, however, fell short of market expectations. EpicAI, an AI-based investment information platform, compiled a consensus forecast a day earlier for revenue of $60.7 billion and operating profit of $46.1 billion. Actual results came in about $2.2 billion to $2.9 billion lower.

SK Hynix attributed the strong performance to sharp gains in DRAM and NAND flash prices from the previous quarter, as well as increased sales of high-value products including high-bandwidth memory, DRAM for AI servers and enterprise solid-state drives.

"Both DRAM and NAND flash recorded sharp price increases from the previous quarter," the company said. "We delivered our highest profitability by expanding sales of high-value products such as HBM, DRAM for AI servers and eSSD."

The earnings rebound also strengthened cash flow. Cash and cash equivalents stood at $63.8 billion at the end of the second quarter, up $24.4 billion from the end of the previous quarter. Borrowings fell by about $500 million to $13.5 billion. Net cash expanded to $50.3 billion.

SK Hynix said a structural shift is emerging as AI evolves into agent-based systems capable of handling complex tasks, boosting demand for both AI memory and conventional memory. Major Big Tech companies are stepping up investment in AI infrastructure and continue to request additional supply, it said.

The company has completed negotiations on long-term supply agreements, or LTAs, with more than 10 customers, including key clients. It is also holding additional talks with major industry customers. Multi-year contracts are intended to improve supply stability and strengthen its medium- to long-term business foundation.

HBM4, the next-generation HBM product, began mass-production shipments in the second quarter. The company plans to significantly expand output in the second half. It said HBM4 meets customers' required operating speeds while delivering industry-leading power efficiency and cost competitiveness.

For HBM4E, which completed sample deliveries in the first half, SK Hynix applied a process designed to support stable mass production. Sales of SOCAMM2, a low-power memory module for AI servers, also rose sharply in the second quarter, and supply of products built on the sixth-generation 10-nanometer-class, or 1c, process began in earnest.

In NAND, 321-layer products accounted for the largest share of total output. SK Hynix plans to raise the share of 321-layer products in its domestic NAND production capacity to about 50% by year-end.

The company is also expanding investment in production facilities. It is moving up the mass-production schedule for M15X and investing to quickly increase output after the clean room at the first Yongin fab opens in early 2027. Mid- to long-term investment plans, including the advanced packaging plant P&T7, the NAND production base M17 and a new semiconductor cluster, will be carried out in phases based on customer demand and investment efficiency.

"We plan to maintain our capital expenditure principles while strengthening both production capacity and financial soundness," SK Hynix said.

Hong Min-seong, Hankyung.com reporter mshong@hankyung.com