SK Hynix quintuples profit in memory crisis
The shortage of DRAM and NAND flash allows SK Hynix to grow at enormous speed. All figures are rising to a record high.
(Image: SK Hynix)
The race for first place among the world's largest memory manufacturers is entering a new round. SK Hynix is leading the way with its fourth consecutive record quarter: the company generated 52.6 trillion Korean Won (KRW) in the first quarter. This means revenue increased by 60 percent in just three months. Year-on-year, it's 200 percent. SK Hynix's biggest competitor, Samsung, will release its figures next week.
At the current exchange rate, 52.6 trillion KRW corresponds to 30.5 billion Euros. Operating and net profit rose even more sharply to the equivalent of 21.8 billion and 23.4 billion Euros, respectively. This represents a fivefold increase year-on-year for both.
Because cloud hyperscalers have been buying all available memory for months, manufacturers can significantly increase prices. As a result, business figures are literally exploding.
SK Hynix's gross margin is now 79 percent, and its operating margin is 72 percent. This even surpasses Nvidia's gross margin of 75 percent, which is already enormous. Other chip companies can only dream of such figures. For comparison: Intel is below 40 percent.
SK Hynix makes most of its money with DRAM, for example for DDR5 RAM, LPDDR5X, and High-Bandwidth Memory (HBM). 78 percent of revenue comes from this type of memory. 21 percent comes from NAND flash, primarily for SSDs.
(Image:Â SK Hynix)
Paper profits on the stock market
Financial gains are boosting SK Hynix's net profit above its operating profit: the company made more than eight billion Euros in non-operating profit. The largest portion, over seven billion, corresponds to paper gains in the form of "valuation gains on fixed assets." Almost another billion comes from currency effects in SK Hynix's favor. The memory manufacturer does not account for the rest. SK Hynix paid approximately 6.5 billion Euros in taxes.
The fixed assets are likely significantly driven up by the Japanese NAND flash manufacturer Kioxia (formerly Toshiba Memory). Its market capitalization has more than tripled since the beginning of the year. SK Hynix has been involved through an investor group since 2018; the company could own around a ten percent stake today.
(Image:Â SK Hynix)
Prices are rising significantly
SK Hynix did not increase production in the first quarter. On the contrary, production volume for NAND flash even decreased by ten percent, presumably due to production adjustments that take weeks. The average selling price for DRAM at SK Hynix has increased by 60 percent compared to the end of 2025, and the average price for NAND flash by 70 percent.
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SK Hynix plans to invest more money in its own semiconductor plants in 2026 than in 2025, without going into detail. As is often the case with Asian companies, there is no concrete outlook for the current second quarter.
The Global Depository Receipts (GDRs) of SK Hynix, traded on Western stock exchanges, are up about two percent since the business figures were announced. The Korean stock is stagnating. However, SK Hynix has already gained over 75 percent on the stock market since the beginning of the year.
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