SK Hynix announced on Thursday an operating profit of 37.61 trillion won (about $25.42 billion) for the first quarter, nearly doubling its previous record from just three months earlier. This impressive performance pushed the chipmaker’s operating margin past 70 percent, outperforming industry giants TSMC and Nvidia.
In its official filing, the chipmaker reported sales of 52.58 trillion won and an operating profit of 37.61 trillion won for the January-March period. These figures represent huge increases of 198.1 percent and 405.5 percent, respectively, compared to the same time last year.
The company’s operating margin hit 72 percent, higher than Taiwan’s TSMC’s 58 percent in the first quarter and Nvidia’s 65 percent in the fourth quarter of last year. Both TSMC and Nvidia are typically seen as benchmarks for profitability in the industry.
This marks a new record for SK Hynix’s quarterly earnings, beating its previous high set in the fourth quarter of last year, which included 32.83 trillion won in sales and 19.17 trillion won in operating profit.
“A seasonal slowdown is usually expected in the first quarter, but demand stayed strong due to growing investment in artificial intelligence (AI) infrastructure,” the company explained.
“Increased sales of high-value products like high-bandwidth memory (HBM), large-capacity server DRAM modules, and enterprise solid state drives (eSSDs) fueled our earnings growth.” This record profit comes as AI infrastructure rapidly expands globally, driving
huge demand for specialized AI memory chips such as HBM. As memory chip makers focused their production on HBM, this also led to shortages in traditional DRAM and even NAND flash products used for storage.
The company noted that demand has recently broadened beyond HBM to include conventional DRAM and NAND. This is happening as AI shifts from training large models to “agentic AI,” which needs constant real-time processing across many different service environments.
During its earnings call, SK Hynix addressed worries, sparked by recent drops in spot DRAM prices, that the current boom in memory chips might be ending. “The spot market makes up only a very small part of the total DRAM market,” the company stated. “The types and amounts of products traded there also differ greatly from our business. It’s hard to see changes in the spot market as reflecting overall market conditions right now… As the imbalance between
supply and demand is likely to continue, the memory price upcycle is expected to last longer.”
The company stressed that this imbalance comes from fundamental changes in the market, not just a temporary situation. While demand is rising, the industry cannot quickly increase its supply capacity because investment was reduced during the previous downturn.
To handle this, SK Hynix said customers are increasingly looking for long-term agreements. The company is “thoroughly reviewing various approaches and different structural options from typical long-term agreements.”
Regarding its HBM business, SK Hynix plans to send samples of its
next-generation HBM4E to major customers in the second half of this year. Their goal is to start mass production in 2027. They noted that this product will use their latest 1c process, adding that the company’s 1c technology is already “mature in terms of yield.”
The 1c process is the sixth-generation 10-nanometer-class node, the newest technology for making memory chips. While rival Samsung Electronics has used the 1c process for its HBM4, SK Hynix used the older 1b process for its HBM4 to ensure manufacturing stability.
This difference had led to speculation that Samsung Electronics could challenge SK Hynix’s leadership in HBM with its HBM4, especially after Samsung publicly announced in February that it was the first company to mass-produce and ship HBM4. SK Hynix is also increasing its HBM4 production and shipments, but competition is growing as Samsung and Micron have also joined Nvidia’s HBM supply chain.
During the earnings call, analysts questioned SK Hynix’s position on HBM4. The company responded that it is “preparing to ramp up products that meet customers’ required performance levels in line with each customer’s mass production schedule.”
SK Hynix also said its capital spending this year would rise sharply from last year. This increase is for ramping up its M15X factory in Cheongju, North Chungcheong Province, speeding up construction of its chip cluster in Yongin, Gyeonggi Province, and securing key equipment like extreme ultraviolet lithography tools.
