SK Hynix S1 Net Profit Surges by 500% YoY

SK Hynix's financial performance in the first quarter of the 2026 fiscal year has set new historical records, with revenue, operating profit, and net profit all reaching peak levels for a single quarter, confirming that the supply and demand tensions in the high-performance memory market continue to deepen.

The company's first-quarter revenue reached 52.58 trillion won, a 160% increase quarter-on-quarter and a staggering 298% increase year-over-year. Operating profit was 37.61 trillion won, surging 196% quarter-on-quarter and a massive 505% increase year-over-year, with an operating profit margin of 72%, setting a new single-quarter historical high.

Net profit stood at 40.35 trillion won, with a net profit margin of 77%. SK Hynix recorded a valuation gain of 10 trillion won (6.76 billion USD) on investment assets in the first quarter alone, mainly due to its holding in Kioxia shares.

The core driver for the performance leap was the significant increase in DRAM and NAND product prices, along with the continuous improvement in the proportion of high-value product mix. The company stated that as the strategic demand for memory from AI computing becomes increasingly prominent, the supply of high-performance memory remains constrained, and the favorable pricing environment is expected to continue for some time.

Looking ahead to the second quarter, the company expects DRAM shipments to increase by a high single-digit percentage quarter-on-quarter, and NAND shipments (including Solidigm) to increase by a mid-teens percentage quarter-on-quarter. At the same time, the company announced that this year's capital expenditure will significantly increase compared to the previous year and plans to introduce additional shareholder return plans, including dividends, share buybacks, and cancellations, within the year.

Revenue and Profit Reach New Highs, Driven by Price and Product Structure

SK Hynix's revenue of 52.58 trillion won for the quarter is nearly three times that of the first quarter of 2025, which was 17.64 trillion won. The surge in revenue主要是 due to two factors: first, a significant increase in DRAM and NAND memory prices; second, the continuous improvement in the proportion of high-value-added products.

From a product perspective, DRAM shipments (B/G) were flat quarter-on-quarter, but the average selling price (ASP) increased by over 60% quarter-on-quarter; NAND shipments decreased by about 10% quarter-on-quarter, but ASP increased by over 70% quarter-on-quarter. The improvement in the high-value product structure was key to pushing the gross profit margin from about 57% in the same period last year to 79% in this quarter.

Selling and administrative expenses were 4.07 trillion won, and the cost of goods sold was 10.90 trillion won, increasing by only 6% quarter-on-quarter, far lower than the 60% quarter-on-quarter growth in revenue, resulting in significant operating leverage and pushing the operating profit margin to a historical peak of 72%.

The net profit for the quarter further expanded compared to operating profit, largely due to non-operating gains. There was a net foreign exchange gain of 1.57 trillion won from currency appreciation, and other non-operating profits, including a 9.94 trillion won valuation gain on investment assets, totaled 12.44 trillion won.

Market Outlook: AI Models from Training to Inference Continue to Drive Memory Demand

SK Hynix maintains a cautiously optimistic attitude towards the market outlook.