Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
SK hynix brushes aside questions on AI memory outlook
SK hynix plant in Icheon, Gyeonggi Province / Courtesy of SK hynix
By Nam Hyun-woo
Chipmaker again posts record quarterly earnings in Q2
SK hynix brushed aside concerns over the outlook for memory chips used in artificial intelligence (AI) accelerators, stressing there is “no doubt” about the growth potential of high-bandwidth memory (HBM) and the company has already secured “visibility” for supplying the chips to major customers next year.
The company announced Thursday that it posted 22.23 trillion won ($16.15 billion) in sales and 9.21 trillion won in operating profit for the second quarter of this year, setting a quarterly earnings record.
Sales grew 35 percent and operating profit soared 68 percent from a year earlier, both beating the brokerage consensus of 20.72 trillion won in sales and 9.06 trillion won in operating profit. Operating profit margin stood at 41 percent.
Thursday’s figures mark new quarterly highs, surpassing the previous records of 19.78 trillion won in sales and 8.08 trillion won in operating profit set in the fourth quarter of last year.
The company attributed the strong performance to continued investment in AI by global tech giants, saying that demand for AI-specific HBM remained solid and shipments of both dynamic random access memory (DRAM) and NAND flash memory exceeded expectations.
“SK hynix expanded sales of 12-layer HBM3e in the DRAM space, while registering a growth in sales of NAND for all applications,” the company said. “With industry-leading competitiveness in AI memory and profitability-first management discipline, the company has maintained a positive earnings trend.”
The company said its inventory levels remained stable in the second quarter, as customers increased memory purchases and ramped up production of finished products using SK memory. Memory demand is expected to continue growing as customers plan new product launches in the second half.
The company noted plans to double its HBM-related earnings from a year earlier and develop capacity to supply HBM4 to meet customer demand.
An introduction of high-bandwidth memory displayed at SK hynix's booth at HPE Discover 2025 in Las Vegas, June 26 / Courtesy of SK hynix
During SK’s earnings call, analysts asked questions about intensifying competition among HBM suppliers and the company’s outlook for the supply-demand balance in 2026. The questions reflected investor concerns after the company’s stock dropped 8.95 percent on July 17, following a Goldman Sachs report raising concerns over a speedbump in the HBM market and the company’s potential loss of pricing power due to competition between suppliers.
“As the AI industry progress, workload intensity is rising sharply, along with growing bandwidth bottlenecks,” the company said. “HBM performance improvements are key to overcoming these challenges, and we have no doubt in demand growth. The market may not see explosive growth as in its early stage, but more clients consider launching new products and services, and we expect strong growth momentum to continue.”
In line with this view, the company said investments for this year will be increased from its initial plans, mostly to improve production capacity for HBM chips, because “the company has already secured visibility on 2026 HBM demand through discussions with major customers and recognized the need for preemptive investment.”
An artist's impression of SK hynix's M15X fabrication plant in Cheongju, North Chungcheong Province / Courtesy of SK hynix
In particular, the company said it is ramping up production capacity through simultaneous constructions for its M15X fabrication plant in Cheongju, North Chungcheong Province; a new site in Yongin, Gyeonggi Province; and an advanced packaging plant in Indiana, U.S.
The M15X fab is scheduled to open in the fourth quarter of this year and begin mass production. The company said the facility will primarily produce next-generation HBM products and that it plans to gradually expand capacity, adding that there will be no cases where it fails to meet client orders due to space constraints at its fabs.
Regarding intensifying competition, the company said, “The memory market has shifted to one where leading players can exercise a certain level of bargaining power ... The advantages of early engagement with customers have become significantly more important than in the past.”
The remark is interpreted as a rebuttal to Goldman Sachs’ view that SK hynix’s pricing power could be weakened if Samsung Electronics begins supplying HBM3e chips to Nvidia. It implies that SK hynix, having established an early and close partnership with Nvidia, is likely to maintain its competitive edge for the time being.
SK hynix’s 9.21 trillion won operating profit nearly doubles Samsung Electronics’ estimated second-quarter operating profit of 4.6 trillion won, announced earlier this month.
At the time, Samsung did not disclose earnings for its chip division, but analysts assume the division posted only around 400 billion won in operating profit, due to losses in its foundry business and weakened competitiveness in HBM.