SK Hynix announced its strongest quarterly performance ever, with Q4 operating profit increasing by more than double year-on-year to 19.2 trillion won (USD 13.5 billion), exceeding analysts' average expectations of 16.7 trillion won. Revenue climbed to 32.8 trillion won. This performance confirms the critical role of the memory segment in the AI chip supply chain.
As a major supplier of high-bandwidth memory (HBM) for NVIDIA's AI accelerators, SK Hynix's stock price has roughly tripled since early September, leading the valuation increase among Asian tech stocks. SK Hynix also disclosed plans to cancel approximately USD 8.6 billion worth of treasury shares next month as part of its efforts to enhance shareholder returns. The company reiterated that it is considering a U.S. listing but has not yet made a decision. Company executives will hold an analyst conference call on Thursday morning, coinciding with the release of full quarterly results from competitor Samsung Electronics.
The current memory shortage may persist, partly due to strong demand for the next generation of HBM memory, which consumes more wafer capacity, and tight supply. Citigroup analysts raised SK Hynix's target price by 56%, expecting average DRAM prices to rise by 120% this year and NAND by 90%. Following the performance boost, the company's stock price in Korea rose over 6% in after-hours trading.
Financial Performance:
<blockquote>
<ul>
<li>FY 2025 revenue of 97.1 trillion won, operating profit of 47.2 trillion won (profit margin 49%), net profit of 42.9 trillion won, all three indicators hitting record highs</li>
<li>Q4 single-quarter revenue of 32.8 trillion won, operating profit of 19.2 trillion won (profit margin 58%), quarter-on-quarter growth of 34% and 68%, setting a quarterly record</li>
<li>Revenue growth of approximately 30 trillion won compared to FY 2024, with operating profit doubling</li>
</ul>
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/0e2392a0-beb2-422d-b54c-383c31d40456.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/0e2392a0-beb2-422d-b54c-383c31d40456.png"/>
</blockquote>
Core Business Progress:
<blockquote>
<ul>
<li>HBM business has become the largest growth engine, with annual revenue increasing by more than 2 times year-on-year</li>
<li>Became the first company in the industry to mass-produce HBM4 in September 2024, currently mass-producing according to customer demand</li>
<li>NAND business set an annual revenue record, with the development of 321-layer QLC products completed</li>
<li>General DRAM advancing to 1c nanometer transition, developing the industry's largest capacity 256GB DDR5 RDIMM</li>
</ul>
</blockquote>
<h2>Doubling HBM Sales Drives Profit Growth</h2>
AI storage chips have become the core driving force behind SK Hynix's performance breakthrough. In the DRAM business, HBM sales increased by more than double year-on-year, becoming the main contributor to record performance. The company emphasized that this is a result of &#34;strategic responses to the restructuring of demand driven by AI, strengthening technological competitiveness, and increasing the proportion of high value-added products while achieving profitability and growth.&#34;
SK Hynix was the first in the industry to establish an HBM4 mass production system last September and is currently mass-producing according to customer requirements. The company stated that as the only enterprise in the industry capable of stably supplying both HBM3E and HBM4, it will strengthen its technological advantages based on established customer trust and proven quality and mass production capabilities
According to reports from South Korean media, SK Hynix is currently the exclusive supplier of HBM3E for Microsoft's custom AI accelerator Maia 200.
The company expects that as the AI market shifts from training to inference, the demand for distributed architecture will expand, making the role of memory even more important. The demand for all types of memory products, including high-performance memory like HBM, server DRAM, and NAND, will continue to grow.
<h2>Product Portfolio Accelerates High-End Upgrade</h2>
In the general DRAM sector, SK Hynix is accelerating its transition to the 10nm 6th generation (1c nm) DDR5 and has demonstrated its leadership in the server module field by developing the industry's largest capacity 256GB DDR5 RDIMM based on 10nm 5th generation (1b nm) 32Gb. The company plans to accelerate the transition to 1c nm and expand its AI memory product portfolio, including SOCAMM2 and GDDR7.
Despite weak demand in the first half of the year, the NAND business completed the development of 321-layer QLC products and achieved the highest annual sales in the second half by responding to demand primarily from enterprise SSDs. The company plans to maximize product competitiveness through the 321-layer transition and actively respond to AI data center storage needs by leveraging Solidigm's QLC enterprise SSDs.
The company stated that it will strengthen its collaboration system with customers and partners and is prepared to supply optimal products in the &#34;customized HBM&#34; field, which is becoming the next core competitive factor.
<h2>Global Capacity Layout Accelerates</h2>
To meet the growing demand, SK Hynix is accelerating the expansion of its global manufacturing capacity. The company stated that it will prioritize meeting customer needs to strengthen cooperative relationships, maximize the capacity of the Cheongju M15X as soon as possible, and steadily expand its medium- to long-term production base through the construction of the Yongin Phase 1 factory.
The advanced packaging plants in Cheongju P&amp;T7 and Indiana, USA, are also progressing smoothly. According to Bloomberg Industry Research, SK Hynix plans to build chip packaging facilities worth 19 trillion won in Cheongju, further highlighting its confidence in HBM demand and consolidating its market leadership. The company plans to establish global integrated manufacturing capabilities covering both front-end and back-end processes to flexibly respond to changes in customer demand.
<h2>Supply-Demand Tension Strengthens Pricing Power</h2>
The transition to high-end AI chips is eating into the capacity of traditional memory. According to Bloomberg, this supply gap is providing manufacturers like SK Hynix with significant pricing power in both the DRAM and NAND sectors.
Richard Clode, portfolio manager of the global technology team at Janus Henderson, stated that the current memory shortage may persist, partly due to strong demand for the new generation of HBM memory consuming more wafer capacity and supply tightness. &#34;From a supply perspective, there is no simple way to meet this new demand driver,&#34; he said. Compared to consumer electronics companies:
<blockquote>
&#34;Hyperscale cloud service providers and AI customers have a completely different perspective on memory prices.&#34;
</blockquote>
Citigroup analysts Peter Lee, Jayden Oh, and Josh Yang forecast that the average selling price of DRAM will rise by 120% this year, while the average selling price of NAND is expected to increase by 90%, and they have raised SK Hynix's target price by 56% and Samsung's by 20%
SK Hynix President Song Hyun-jong stated:
<blockquote>
&#34;We will create sustainable performance growth based on differentiated technological competitiveness, while maintaining the best balance between future investments, financial stability, and shareholder returns,&#34; and emphasized that &#34;we will go beyond being a mere product supplier to strengthen our role as a core infrastructure partner in the AI era to meet customer AI performance requirements.&#34;
</blockquote>
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SK Hynix's operating profit in the fourth quarter increased by more than double year-on-year, reaching 19.2 trillion won (approximately 13.5 billion USD), exceeding analysts' average expectations of 16.7 trillion won. Revenue climbed to 32.8 trillion won. Boosted by the performance, the company's stock price in South Korea rose by over 6% in after-hours trading. The HBM business became the largest growth engine, with annual revenue increasing by more than 2 times year-on-year

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The strongest performance in history! SK Hynix's Q4 operating profit doubled to 19.2 trillion won, with sustained strong demand for AI memory | Earnings report insights