HBM, DRAM and NAND/SSD supplier SK Hynix reported massively high revenues and profit in its second 2026 quarter, but fell short of revenue expectations and its stock price slumped.
Its revenues were ₩79.32 trillion ($54.54 billion), up 257 percent Y/Y, 51 percent Q/Q, and more than its entire 2024 revenues of ₩66.2 trillion ($45.97 billion). Consistently high demand for its semiconductor products, particularly high-bandwidth memory (HBM) combined with supply shortages to enable enormous price increases. The company’s average quarterly revenues were consistently below ₩16 trillion ($11 billion) from 2019 until 2024, when the ChatGPT AI boom ignited demand for Nvidia GPUs and their attached HBM. A chart shows the exponential quarterly revenue growth;
The [GAAP] net income of ₩93.9 trillion ($64.6 billion), larger than its revenue number, was greatly inflated by the company’s sale of part of its stake in Kioxia. Its internal operating profit of ₩60.54 trillion ($41.63 billion) number does not include the ₩63.27 trillion ($43.5 billion) proceeds from that sale, and was below the expected ₩64 trillion ($44 billion) amount.
Even though it was the Korean company’s fifth consecutive record high operating profit, this miss caused its shares to slump 9.6 percent. The post-IPO US shares also declined around 3.5 percent. The company said it was “reviewing additional (US ADR) shareholder return measures to enhance both scale and continuity of returns.”
Reuters said the miss was caused by SK Hynix missing out on DRAM price rise-boosted revenues, because it didn’t make enough DRAM, preferring to use DRAM bits in HBM products instead.
The basic product revenue split was 73 percent DRAM+HBM, and 27 percent NAND. The overall revenue was divided between various device types, as the chart illustrates.
SK Hynix expects AI inferencing to spread widely and continue increasing demand for all three of its products; HBM, DRAM, and NAND. The company has signed around 10 long term agreements with major customers to ensure they get chips in return for financial commitments by them to SK Hynix.
We understand that these results presage similarly enormously high quarterly earnings reports from Micron and Samsung.
DRAM and NAND manufacturing capacity expansions are under way but will take years to fully come on stream and meaningfully increase supply. We can look forward to our memory and NAND oligopolists continuing to increase prices as supply limitations meet demand increases, and pricing analysts wonder by just how much they can increase prices before the “gouging”word starts being spoken aloud.