Record profits expected for SK hynix in Q1 as market weighs chip momentum

A mockup showing the structure of SK hynix's high-bandwidth memory 4 is displayed at the company's booth at Nvidia GTC 2026 in San Jose, Calif., March 17. Courtesy of SK hynix

SK hynix will announce its first-quarter earnings for the year on April 23, with analysts expecting the memory chip giant to post record-breaking profits.

The market is now debating whether the company can sustain its current level of profitability or if the global memory chip upcycle is nearing its peak.

As of Thursday, brokerages expect SK hynix to post 47.66 trillion won ($32.2 billion) in sales and 32.69 trillion won in operating profit for the first quarter, representing year-on-year growth of 170 percent and 339 percent, respectively. The operating margin is projected to reach 68.6 percent.

SK hynix is highly likely to smash its previous performance record — 32.83 trillion won in sales and 19.17 trillion won in operating profit — from the fourth quarter of last year. The surge was driven by robust demand tied to the artificial intelligence boom, with expanded sales of high-value memory products centered on high-bandwidth memory (HBM), while the average selling price of memory products rose across all segments, including conventional dynamic random access memory (DRAM) and NAND flash memory.

Brokerages have continuously raised profit forecasts in their reports. On Thursday alone, Kiwoom Securities analyst Park Yu-ak estimated SK hynix’s operating profit at 40.3 trillion won, while DS Investment & Securities analyst Lee Su-rim projected it to be 39 trillion won.

“Due to the skyrocketing prices of server DRAMs and enterprise solid-state drives, the blended average selling prices of DRAM and NAND products are anticipated to rise 55 percent and 81 percent from the previous quarter,” Park said.

SK hynix’s HBM supply for this year is virtually sold out, with large tech companies reportedly making upfront payments just to secure volumes. Profitability is expected to improve further as the company has begun shipments of its sixth-generation HBM4 to major tech firms this year.

Given that rival Samsung Electronics announced 57.2 trillion won in operating profit earlier this week, the two Korean memory makers’ combined first-quarter profit is expected to approach 100 trillion won, a figure that represents a significant portion of Korea’s 2026 national budget of 730 trillion won.

With SK hynix expected to post record profits, the market is now anticipating when it will reach its peak. Recently, skeptics have raised concerns that the current memory upcycle has already peaked, citing a recent drop in spot prices for PC DRAM in China.

However, industry officials said the price drop does not reflect contract prices set by chipmakers but rather wholesale prices used in short-term transactions. They noted that the decline was driven by wholesalers releasing inventory for clearance or a surge in the secondary market for server DRAM modules, and thus is not related to the broader growth momentum of the memory market.

“The factor that determines a memory chip maker’s profitability and earnings is contract prices, not spot prices,” DS Securities’ Lee said. “Currently, DRAM spot prices carry a premium over contract prices, and contract prices are expected to continue rising even if spot prices decline.”

SK hynix headquarters in Icheon, Gyeonggi Province / Yonhap

The prevalence of long-term agreements between memory firms and large tech companies supports the view that the current upcycle will likely be sustained.

SK hynix is reportedly in talks with Google over a long-term DRAM supply agreement, which would SK hynix’s next-generation HBM. The two sides were initially considering a three-year term, but are now discussing a possible extension of the contract period to five years to maximize supply stability.

“So far, the memory industry has been swayed by cyclical market movements, with profits plunging when the demand declines,” an industry official said. “As memory providers currently maintain the upper hand in negotiations, they are likely to pursue long-term agreements over short-term contracts to reduce price volatility.”

DS Securities’ Lee added, “The recent expansion of long-term agreements will help set the bottom for prices and secure volumes through upfront payments, thus limiting future price declines.”