SK Hynix unveiled its most powerful quarterly performance in history, with Q4 operating profit more than doubling year-over-year to 19.2 trillion won ($135 billion), surpassing the analyst consensus estimate of 16.7 trillion won. Revenue climbed to 32.8 trillion won. This result solidifies the critical role of the memory segment within the AI chip supply chain.
As a primary supplier of High Bandwidth Memory (HBM) for NVIDIA's AI accelerators, SK Hynix has seen its stock price approximately triple since early September, leading the valuation gains among Asian tech stocks. SK Hynix also disclosed plans to cancel treasury shares worth about $8.6 billion next month as part of its shareholder return initiatives. The company reiterated that it is considering a US listing but has not yet made a final decision. Company executives are scheduled to hold an analyst call on Thursday morning, coinciding with competitor Samsung Electronics' release of its full quarterly results.
The current memory shortage is likely to persist, partly due to robust demand for next-generation HBM memory, which consumes more wafer capacity, coupled with tight supply. Analysts at Citigroup raised their price target for SK Hynix by 56%, forecasting that DRAM average selling prices will increase by 120% this year, while NAND prices are expected to rise by 90%. Bolstered by the strong earnings, the company's shares rose over 6% in after-hours trading in Korea.
Financial Performance:
Fiscal Year 2025 revenue reached 97.1 trillion won, operating profit was 47.2 trillion won (a 49% margin), and net profit stood at 42.9 trillion won, with all three metrics hitting record highs. Q4 single-quarter revenue was 32.8 trillion won, with operating profit at 19.2 trillion won (a 58% margin), representing sequential growth of 34% and 68% respectively, setting new quarterly records. Compared to Fiscal Year 2024, revenue increased by approximately 30 trillion won, while operating profit achieved a doubling in growth.
Core Business Progress:
HBM business emerged as the largest growth engine, with full-year revenue increasing more than twofold year-over-year. In September 2024, the company became the first in the industry to establish a mass production system for HBM4 and is currently mass-producing according to customer demand. NAND business achieved an annual revenue record, with development completed for 321-layer QLC products. For general DRAM, the transition to 1c-nanometer technology advanced, and the industry's highest capacity 256GB DDR5 RDIMM was developed.
HBM Sales Doubling Drives Profit Growth
AI memory chips have become the core driver behind SK Hynix's record-breaking performance. Within its DRAM business, HBM sales more than doubled year-over-year, serving as the primary contributor to the historic results. The company emphasized that this is the outcome of a "strategic response to an AI-driven demand restructuring, which involved strengthening technological competitiveness and expanding the proportion of high value-added products, thereby simultaneously achieving both profitability and growth."
SK Hynix took the lead in the industry by establishing a mass production system for HBM4 last September and is now producing according to customer-required volumes. The company stated that as the only industry player capable of stably supplying both HBM3E and HBM4 simultaneously, it will leverage established customer trust, technological superiority, and proven quality and mass production capabilities. According to Korean media reports, SK Hynix is currently the exclusive supplier of HBM3E for Microsoft's custom AI accelerator, Maia 200.
The company anticipates that as the AI market shifts from training to inference and demand for distributed architectures expands, the role of memory will become even more crucial. Demand is expected to grow not only for high-performance memory like HBM but across the entire memory product line, including server DRAM and NAND.
Product Portfolio Accelerates Upgrade to High-End
In the general DRAM sector, SK Hynix is accelerating the transition to the 10-nanometer class sixth-generation (1c-nanometer) DDR5. It has demonstrated leadership in the server module space by developing the industry's highest capacity 256GB DDR5 RDIMM based on 10-nanometer class fifth-generation (1b-nanometer) 32Gb chips. The company plans to speed up the 1c-nanometer transition and expand its AI memory portfolio, including products like SOCAMM2 and GDDR7.
Despite soft demand in the first half, the NAND business completed development of its 321-layer QLC product. In the second half, by responding to demand primarily for enterprise SSDs, it achieved its highest annual sales ever. The company aims to maximize product competitiveness through the transition to 321-layer technology and actively address AI data center storage needs by leveraging Solidigm's QLC enterprise SSDs.
The company stated it will strengthen collaborative systems with customers and partners and is preparing to supply optimal products in the field of "customized HBM," which is becoming a key competitive factor for the next generation.
Global Capacity Expansion Accelerates
To meet growing demand, SK Hynix is accelerating the expansion of its global manufacturing capabilities. The company stated it will prioritize meeting customer demand to reinforce partnerships, rapidly maximize capacity at the Cheongju M15X facility, and steadily build its mid- to long-term production foundation through the construction of the first phase of the Yongin cluster.
Projects at the Cheongju P&T7 and the advanced packaging plant in Indiana, USA, are also progressing smoothly. According to Bloomberg Intelligence, SK Hynix's plans for a 19 trillion won chip packaging facility in Cheongju further highlight its confidence in HBM demand and solidify its market leadership. The company plans to establish integrated global manufacturing capabilities covering both front-end and back-end processes, enabling flexible responses to changing customer needs.
Tight Supply-Demand Dynamics Strengthen Pricing Power
The shift towards high-end AI chips is consuming capacity previously allocated to traditional memory. As reported by Bloomberg, this supply gap is granting significant pricing power to manufacturers like SK Hynix in both the DRAM and NAND markets.
Richard Clode, Portfolio Manager for the Global Technology Team at Janus Henderson, suggested the current memory shortage might continue, partly because robust demand for new-generation HBM memory consumes more wafer capacity amid already tight supply. "From a supply perspective, there is no easy way to meet this new demand driver," he said. Comparing the perspective of hyperscale cloud providers and AI clients to that of consumer electronics companies, he noted:
"Hyperscale cloud providers and AI customers view memory pricing from a completely different perspective."
Analysts Peter Lee, Jayden Oh, and Josh Yang at Citigroup projected in a report that DRAM average selling prices will rise 120% this year, while NAND prices are expected to increase 90%. They raised their price target for SK Hynix by 56% and for Samsung by 20%.
SK Hynix CEO Song Hyun-jong stated:
"We will create sustainable earnings growth based on differentiated technological competitiveness, while maintaining an optimal balance between future investment, financial stability, and shareholder returns." He emphasized, "We will go beyond being a mere product supplier and strengthen our role as a core infrastructure partner in the AI era, enabling customers to achieve their required AI performance."
More updates to follow...