SK Hynix Profit Jumps To Record, Misses As AI Jitters Hit

SK Hynix reported April–June results on Wednesday in Seoul, with operating profit up more than sixfold to a record 60.5 trillion won. The figure missed a 64 trillion won consensus. Revenue rose 257% to 79.3 trillion won, below a forecast of 84 trillion won. Net profit climbed to 93.9 trillion won, lifted by 63.3 trillion won in investment gains tied to the June completion of its stake sale in Japanese memory maker Kioxia, an investment first made in 2018 through a Bain Capital-led consortium.

Shares fell 9.6% on the day. The benchmark KOSPI finished down 6%. The stock has dropped more than half from a record high last month but remains up about 115% for the year. Investors focused on the risk that large technology firms could slow spending on AI infrastructure.

The company pointed to delays in shipments of some advanced products, which limited price gains for its core DRAM chips. Analysts highlighted slower-than-expected shipments of next-generation high-bandwidth memory (HBM4), which delayed revenue recognition in the quarter, and noted that SK Hynix’s higher mix of HBM-where price increases lagged conventional memory-pressured near-term pricing.

Management described demand for AI memory as intact. “Major customers are still requesting more memory supply,” President Song Hyun-jong told investors on an earnings call. To improve planning and dampen price swings, SK Hynix is expanding long-term supply agreements, typically five years and structured with deposits. The company has finalized about 10 contracts and is in talks with additional large customers. Analysts view these agreements as improving order visibility while potentially limiting short-term price upside.

Capital spending is guided to increase into the high-40 trillion won range this year, from 30.2 trillion won in 2025. SK Hynix indicated it will align capacity additions with demand to avoid oversupply. It expects memory demand to continue as AI services generate revenue that supports ongoing infrastructure investment by major technology companies.

Liquidity improved with net cash reaching 88 trillion won at the end of June. The company aims to lift that balance above 100 trillion won to support customer needs and stabilize operations. With cash nearing the target, investors are watching for details on capital allocation. SK Hynix plans to outline the timing, size and structure of a shareholder return plan later this year. “SK needs to come up with a concrete shareholder return policy to turn around investor sentiment,” stated Greg Roh, head of research at Hyundai Motor Securities.

Competition remains intense. Samsung Electronics has flagged a 19-fold jump in second-quarter operating profit and is due to report results on Thursday. “Samsung has greater pricing power and has raised prices more aggressively than SK Hynix,” noted Lee Su-rim, an analyst at DS Investment & Securities.

Broader market pressure reflects questions about how cloud providers including Microsoft, Alphabet, Amazon, Meta Platforms and Oracle will fund large, multi-year AI buildouts. SK Hynix maintains that memory demand related to AI remains resilient as customers monetize AI services and continue to invest in infrastructure. “There are concerns that tech firms will take a breather in infrastructure spending,” according to Lee Min-hee, an analyst at BNK Investment & Securities.