The numbers alone would have been enough to grab attention. But what SK Hynix revealed alongside its first-quarter results tells a deeper story: the company has more orders for high-bandwidth memory than it can possibly produce over the next three years.
That supply-demand imbalance is reshaping the entire memory landscape. Revenue crossed the 50 trillion won threshold for the first time, landing at 52.58 trillion won. Operating profit more than doubled from the prior quarter to 37.61 trillion won, yielding an operating margin of 72 percent — a figure that outstrips both Nvidia and TSMC. For a period that typically sees seasonal weakness, the performance is nothing short of extraordinary.
Pricing Power Meets Structural Scarcity
The average selling price for DRAM modules jumped roughly 60 percent quarter-on-quarter, while NAND prices continued their upward trajectory. SK Hynix CEO Chey Tae-won has warned that the wafer shortage could persist through 2030, and Park Joon-deok, the company’s DRAM marketing chief, expects memory prices to stay elevated “longer than in the past.” Shinhan Securities echoes that view, forecasting excess demand for both DRAM and NAND throughout all of 2026.
The bottleneck is most acute in high-bandwidth memory, where SK Hynix already controls 59 percent of the market. The company is restructuring long-term supply agreements with major clients like Google and Microsoft, prioritizing volume guarantees over pricing flexibility.
Billions Poured Into Production
Capital expenditure is set to rise sharply from last year’s 30.2 trillion won. The bulk of spending will go toward expanding the M15X fab, developing the new Yongin chip cluster, and acquiring advanced EUV lithography equipment from ASML. The investment-to-revenue ratio is expected to stay in the mid-30 percent range.
The Cheongju site is getting a major boost too. A double-digit billion-dollar sum is flowing into the new P&T7 factory, which will consolidate advanced packaging for HBM4 using a logic process co-developed with TSMC. SK Hynix is reportedly set to supply around 70 percent of the HBM4 components needed for Nvidia’s upcoming Vera Rubin superchip.
Should investors sell immediately? Or is it worth buying SK Hynix?
On the product front, the company began mass production of the 192GB SOCAMM2 module on April 20. Built on the 1cnm process, it delivers more than double the bandwidth with 75 percent better energy efficiency compared to conventional RDIMMs. The module is designed specifically for Nvidia’s Vera Rubin platform. SK Hynix has also started volume production of LPDDR6 on the same 1cnm node — a global first.
Cash Cushion and Capital Markets Ambitions
The balance sheet provides ample firepower. Net liquidity stands at roughly 35 trillion won, or about $23.6 billion — enough to fund the investment push without external financing. Management aims to grow that cash pile to over 100 trillion won in the medium term, while the board evaluates potential share buybacks.
A US listing is also on the cards. The company plans to offer American Depositary Receipts on Wall Street, tapping into investor appetite for AI-related semiconductor plays.
Stock Hits a Ceiling — For Now
The shares touched a new 52-week high of 1,225,000 won on the day of the earnings release, bringing the year-to-date gain to roughly 81 percent. Since October 2025, the stock has rallied about 140 percent. That run-up left little room for surprise when the actual numbers landed — the shares slipped 2.1 percent in morning trading as the market had already priced in the strong results.
Looking ahead, the first phase of the Yongin cluster has been pulled forward by three months and is now set to start in February 2027. Analysts project full-year operating profit above 200 trillion won. The critical question is whether capacity expansion can close the structural supply gap fast enough for SK Hynix to sustain its pricing power. With a three-year backlog already on the books, the pressure is on to deliver.
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