SK hynix is expected to deliver record-breaking first-quarter earnings, with operating profit potentially topping 40 trillion won ($29 billion) as surging demand for AI memory drives a full-blown industry upcycle.
The chipmaker is set to report results on April 23. Consensus compiled by FnGuide points to operating profit of 34.9 trillion won on revenue of 50.1 trillion won — up 369 percent and 184 percent on-year, respectively — already marking a quarterly record.
Analysts say profitability is also set to surge alongside earnings, with margins seen approaching levels rarely seen in the semiconductor industry.
But estimates have been moving higher after stronger-than-expected results from rivals including Samsung Electronics and Micron Technology, both of which posted earning surprises driven by AI-led memory demand.
Micron reported quarterly operating profit of $16.1 billion, up more than 800 percent from a year earlier, while Samsung logged a record 57.2 trillion won in operating profit for the first quarter.
In operating margin, analysts expect SK hynix's operating margins to approach 70 percent in overall memory products, with DRAM margins potentially reaching 80 percent — levels that would surpass even TSMC, widely regarded as the industry's profitability benchmark.
TSMC reported a 58.1 percent operating margin in the first quarter.
The earnings boom reflects a sharp increase in AI server demand, driving sales of high-margin HBM as well as a broad-based rise in DRAM prices. Stronger demand for enterprise solid-state drives, fueled by hyperscale data center investment, is also supporting NAND flash pricing.
Market trackers estimate SK hynix held a 35.2 percent share of the global DRAM market last year, slightly ahead of Samsung Electronics at 34.6 percent.
The robust outlook is prompting aggressive upgrades to full-year forecasts. Nomura Securities has projected SK hynix’s annual operating profit could reach 256 trillion won, while combined operating profit for Samsung and SK hynix may approach 580 trillion won.
Analysts say the current cycle could extend for years.
"Based on conservative demand assumptions and aggressive capacity expansion, memory markets are likely to remain in a state of undersupply through 2028," said Kim Young-gun, an analyst at Mirae Asset Securities.
The strong earnings momentum is also raising focus on cash generation as SK hynix ramps up long-term investments, including its Yongin semiconductor cluster. The company is pursuing a US listing via American depositary receipts to broaden access to global capital, targeting a launch in the second half of this year.
SK hynix CEO Kwak Noh-jung has set a goal of securing more than 100 trillion won in net cash over time to support sustained investment, up from about 12.7 trillion won at the end of last year.
herim@heraldcorp.com
