SK Hynix Earnings Top Estimates as AI Boom Lifts Memory Prices — Update

By Kwanwoo Jun

Nvidia supplier SK Hynix reported a fivefold jump in quarterly net profit on surging demand for advanced memory chips, indicating that the global artificial-intelligence buildout remains intact despite risks posed by the Middle East conflict.

The world's second-largest memory chip maker, a key beneficiary of the AI boom, continues to ramp up investment to boost production capacity. At the same time, customers are scrambling to secure available supplies of cutting-edge semiconductors for AI data centers, smartphones and other devices.

Memory chips act like fuel lines for computing engines. As AI processors from Nvidia and others grow more powerful, they require more memory, including both conventional chips and advanced high-bandwidth memory.

SK Hynix Chief Financial Officer Kim Woo-hyun said on a call after the company's first-quarter earnings that chip demand will likely continue to outpace supply over the next three years, especially for HBM products. "Given robust demand, we expect 2026 investment scale to increase significantly compared with last year," Kim said.

Executives said the company is well-positioned to manage shipping disruptions due to the war in the Middle East, a key supplier of helium, tungsten and other critical chip-making materials. They expect only a limited impact from the geopolitical risks.

Net profit was a record 40.346 trillion won, equivalent to $27.28 billion, for the three months ended March, up 398% from the year-earlier figure and well above street views. Analysts had expected 28.109 trillion won, according to a FactSet-compiled consensus forecast.

Revenue also rose to a record, tripling to 52.576 trillion won. That resulted in a record operating profit of 37.610 trillion won.

The company said its operating profit margin reached 72% in the quarter, a new high, while its net cash position stood at 35 trillion won.

Increased sales of high-end products such as HBMs, data server memory modules and enterprise solid-state drives drove the quarterly earnings as strong chip demand persisted, it said.

Shares in the company have surged nearly 90% this year, reflecting investors' optimism about its growth outlook. The stock briefly hit a new all-time high Thursday before reversing course to trade about 2% lower. Most analysts expect the company to stay on track for record annual earnings in 2026.

SK Hynix earlier this week said it will invest an additional 19 trillion won to build a new advanced chip-packaging plant in Cheongju, South Korea, in addition to U.S. chip-packaging facilities already under construction in Indiana. The investment aims to meet rising global demand for AI memory, it said in a regulatory filing.

The company is also building a massive semiconductor manufacturing hub in Yongin, south of Seoul, with an estimated investment of 600 trillion won. In February, it announced an additional 22 trillion won investment for the first of four chip-fabrication plants at the site, bringing its initial investment commitment there to 31 trillion won.

SK Hynix last month unveiled a plan to purchase about $8 billion in extreme ultraviolet equipment--advanced lithography machines used to print tiny circuit patterns on silicon wafers--from Dutch chip-making equipment giant ASML by the end of 2027 to support mass production of next-generation chips.

The company, which supplies high-bandwidth memory--a critical component of AI accelerators and applications--to Nvidia, is seeking a U.S. listing this year to raise funds. The potential U.S. listing could attract more global investors to help fund its ambitious investment plans.

The investment and fundraising plans illustrate SK Hynix's efforts to maintain its lead in the increasingly competitive HBM and broader AI chip market.

SK Hynix has led the HBM market by developing and supplying HBM3 and HBM3E products to Nvidia ahead of rivals such as Samsung Electronics and Micron Technology. In February, Samsung claimed to have beaten SK Hynix to become the world's first to mass produce more advanced HBM4, with plans to provide upgraded HBM4E samples later in the year.

SK Hynix on Thursday said it plans to send HBM4E samples to customers in the second half of 2026, with commercial supply set to begin in 2027.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

April 23, 2026 00:36 ET (04:36 GMT)