Key Takeaways
- SK Hynix (000660) reported an all-time high quarterly operating profit of KRW 60.54 trillion, a massive 557% increase year-over-year, though it fell short of the KRW 64.22 trillion analyst consensus.
- Net profit surged to KRW 93.82 trillion, vastly outperforming the estimated KRW 54.32 trillion, primarily driven by a significant KRW 27.4 billion windfall from the company's investment in Kioxia.
- Quarterly revenue reached KRW 79.32 trillion, missing the KRW 83.85 trillion estimate, as the company's heavy focus on high-end AI memory meant it benefited less from the broader price rally in conventional chips.
- AI-related demand remains the primary growth engine, with sales to global tech giants and data center operators expected to account for 70% of total revenue in the second quarter.
AI Infrastructure Drives Record Performance
SK Hynix (000660) announced record-breaking results for the second quarter of 2026, fueled by the ongoing "supercycle" in artificial intelligence infrastructure. The company, a primary supplier to Nvidia (NVDA), saw its operating profit jump 557% compared to the same period last year. This performance pushed cumulative first-half revenue past the KRW 100 trillion mark for the first time in the company's history.
Despite the record numbers, the results presented a mixed bag for investors. Both sales (KRW 79.32 trillion) and operating profit (KRW 60.54 trillion) missed market expectations. Analysts noted that while SK Hynix (SKHY) dominates the high-margin High Bandwidth Memory (HBM) market, its lower exposure to conventional memory chips—which saw a sharper price rally this quarter—led to the slight miss against consensus.
Kioxia Windfall Boosts Bottom Line
The most striking figure in the report was the net profit of KRW 93.82 trillion, which nearly doubled analyst projections. This surge was largely attributed to non-operating income related to the company's stake in Japanese chipmaker Kioxia. Following Bain Capital's exit and the revaluation of assets, SK Hynix (000660) recognized a massive gain, significantly strengthening its financial health.
Management emphasized that this capital will be used to reinforce production capacity and maintain CapEx discipline. The company is preparing for mid-to-long-term growth by investing in its Yongin cluster infrastructure and ramping up EUV equipment to maintain its technological edge in the next generation of memory.
Future Outlook and HBM4 Leadership
Looking ahead, SK Hynix (000660) remains optimistic about the structural growth of AI demand. The company revealed it has secured long-term agreements with approximately 10 key customers, ensuring stable demand for its high-performance products. Its next-generation HBM4 has already achieved the operating speeds and power efficiency required by top-tier customers, positioning the firm to lead the market into 2027.
However, the stock has faced recent volatility, including a record 15% tumble earlier in July due to concerns over an overstretched AI rally and a rotation into its newly listed U.S. American Depositary Receipts (ADRs). Investors are now weighing whether the current valuation accurately reflects the "pricing debate" versus the undeniable strength in physical demand for AI memory.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.