SK Hynix reported strong year-over-year and quarter-over-quarter growth for the second quarter, but its results fell short of analyst expectations, triggering a sharp share price decline. The company's stock dropped 12.2% in Wednesday trading.
Quarterly results
For the second quarter, SK Hynix posted revenue of 79.32 trillion won, compared with the roughly 84 trillion won analysts had expected. Operating profit was 60.54 trillion won, below the forecast of about 64 trillion won. These figures were reported by CNBC.
Growth rates
Despite missing consensus estimates, the company delivered substantial gains: revenue rose 257% year-on-year and operating profit increased nearly 557% year-on-year. Compared with the previous quarter, revenue was up 51% and profit rose 61%. For the first time in its history, SK Hynix's consolidated first-half revenue exceeded 100 trillion won, which the company attributes to strong demand for AI-related products.
Drivers of the expansion
SK Hynix said expanding AI infrastructure has produced sustained demand, and products intended for high-performance AI servers reached record price levels. Prices rose across both DRAM and NAND flash markets. The company highlighted that higher-margin, value-added products — such as HBM, DRAM for AI servers, and enterprise SSDs — helped lift profitability.
Josh Gilbert, eToro's lead analyst for Asia-Pacific, noted that an 83% gross margin indicates the company retains pricing power. He said the situation points to buyers competing for constrained supply rather than weakening demand.
Technology and production developments
SK Hynix claims a significant advantage with HBM4 technology in terms of energy efficiency and cost competitiveness. The company began mass production of HBM4 in the second quarter and completed HBM4E sample shipments during the half-year.
In the NAND business, SK Hynix is accelerating the transition to more advanced manufacturing processes: 321-layer products already make up the largest portion of total production, and they could account for roughly half of domestic capacity by year-end.
Investments and market moves
The company plans this year's capital expenditures near the upper end of a 40 trillion won band. SK Hynix completed an ADR listing on the Nasdaq in July and intends to leverage that move to strengthen its access to U.S. capital markets. Management says it will prioritize investments to support growth while maintaining a stable financial base.
Customers and agreements
Key customers include Nvidia. The partnership with Nvidia was recently deepened with a multi-year agreement reportedly worth more than $500 billion.
Market reaction
Following the miss against expectations, SK Hynix shares fell 12.2% in trading on Wednesday. While the headline numbers disappointed relative to forecasts, the underlying data show strong expansion driven by AI demand and higher pricing.
This article does not constitute investment advice or a recommendation.
