TLDR
- First-quarter net income reached a record 40.3 trillion won ($27.2B), representing a nearly 400% increase compared to the same period last year
- Quarterly revenue exceeded 50 trillion won for the first time ever, although it fell slightly below market expectations
- Operating profitability achieved an unprecedented 72% margin, with operating income almost doubling sequentially from Q4 2025
- The chipmaker commands a 57% market share in HBM and expects to provide samples of its HBM4E technology in the latter half of 2026
- A 19 trillion won investment in a new South Korean manufacturing plant reflects efforts to meet accelerating AI chip demand
SK Hynix delivered exceptional results to kick off 2026. The memory semiconductor manufacturer from South Korea announced its most profitable quarter ever on Thursday, propelled by elevated pricing for artificial intelligence memory components.
First-quarter net income totaled 40.3 trillion won ($27.2 billion), significantly exceeding the consensus analyst projection of 29.4 trillion won. Quarterly sales reached 52.58 trillion won—marginally below the anticipated 53.55 trillion won, yet representing nearly triple the revenue from the corresponding quarter last year.
Operating income increased fivefold year-over-year and climbed close to 100% from the preceding quarter. The operating margin touched 72%, establishing another company record.
Shares advanced as much as 3.6% during early Seoul market hours before moderating to close down 0.9%.
The company attributed these outstanding results to climbing memory prices and intensifying demand stemming from AI infrastructure expansion. Even though the first quarter traditionally experiences seasonal weakness, demand remained robust throughout the period.
“Strong demand persisted due to expanded investments in AI infrastructure,” the company said in its earnings release.
HBM Leadership Fuels Performance
SK Hynix maintains its position as the global leader in high-bandwidth memory supply, an essential element in AI server architecture. The company controls a 57% stake in the HBM marketplace and serves as a principal supplier to Nvidia.
HBM demand intensity has reached levels that have created production bottlenecks, subsequently driving up pricing for standard DRAM products as well. The DRAM sector experienced 30% sequential growth for two consecutive quarters, based on Counterpoint Research analysis.
The firm’s DRAM marketing executive suggested that the favorable pricing environment may prove “more prolonged compared with the past,” given suppliers’ challenges in matching demand levels.
Samsung retook the leading position in total DRAM revenue from SK Hynix during Q4 2025, according to Counterpoint figures. However, SK Hynix continues to dominate the HBM category, where profit margins are substantially higher.
Samsung revealed in February that it had commenced shipments of its initial HBM4 products. SK Hynix had already provided HBM4 samples nearly twelve months prior, and announced Thursday its intention to deliver samples of its seventh-generation HBM4E during the second half of 2026, targeting volume production for 2027.
Manufacturing Expansion and Supply Chain Strategy
The organization revealed plans for a 19 trillion won capital investment in a new production facility located in Cheongju, South Korea.
SK Group Chairman Chey Tae-won has indicated that the worldwide chip wafer supply shortage may continue through 2030, considering that capacity expansion projects require four to five years to complete and the anticipated deficit exceeds 20%.
Regarding supply chain vulnerabilities, the continuing Middle East tensions have generated concerns about obtaining materials including helium, bromine, and tungsten. SK Hynix indicated it has diversified its sourcing network and accumulated adequate stockpiles, anticipating minimal production disruption.
Extended-term liquefied natural gas contracts are also secured to help mitigate energy cost volatility.
Counterpoint Research analyst MS Hwang told CNBC that Q1 performance from memory manufacturers “show strong profitability and reveal that a lot more memory is needed for AI inference than expected.”
Mirae Asset Securities analyst Kim Young-gun indicated expectations for SK Hynix’s earnings trajectory to maintain strength throughout 2026, highlighting multi-year supply contracts being finalized with major technology clients—some of whom are actively pursuing extensions beyond original agreement terms.
