SK hynix Inc. announced today that it recorded 16.4233 trillion won in revenues, 5.4685 trillion won in operating profit (with an operating margin of 33%), and 4.12 trillion won in net profit (with a net margin of 25%) in the second quarter. Quarter revenues marked all-time high, far exceeding the previous record of 13.811 trillion won in the second quarter of 2022. Operating profit also increased significantly, marking 5 trillion won for the first time in 6 years since the second quarter (5.5739 trillion won) and the third quarter (6.4724 trillion won) of 2018 during the semiconductor super boom.

The company said that continuous rise in overall prices of DRAM and NAND products with strong demand for AI memories including HBM led to 32% increase in revenues compared to the previous quarter. Also, with the sales for premium products on the rise and exchange rate effects adding, the operating profit ratio in the second quarter rose 10 percentage points from the previous quarter to 33%, performing to market expectations.In the DRAM area, SK hynix increased the proportion of high-value-added products such as HBM3E and DRAM for servers, which the company began mass production since this March. In particular, HBM sales went up by more than 80% compared to the previous quarter and more than 250% compared to the same period last year, leading the company's improvement.

For the NAND business, the sales of eSSD and mobile products increased for the most part. Especially eSSD sales, which continued to grow steeply, rose by about 50% from the first quarter. The company emphasized that the average selling price (ASP) has continued to rise across NAND products since the fourth quarter of last year, turning to profit for two consecutive quarters.

SK hynix forecasts that the demand for AI server memory will continue to rise in the second half, and sales of high-performance memory products will increase as new PC and mobile products supporting On-Device AI will be released on the market. The company also expects general memory product market to be on a steady growth path as well.

In accordance with this movement, SK hynix plans to continue its leadership in the HBM market by mass-producing 12-layer HBM3E products, which the company provided samples to major customers, in the third quarters.

SK hynix also plans to launch 32 Gb DDR5 DRAM for servers and MCRDIMM (1) for high-performance computing in the second half of the year to maintain its competitive advantage in the DDR5 area, where the company is the only provider of the highest capacity 265 GB products for servers.

(1) MCR DIMM (Multiplexer Combined Ranks Dual In-line Memory Module): A module product with multiple DRAMs bonded to a motherboard, in which two ranks, basic information processing units, operate simultaneously, resulting in improved speed

For NAND, SK hynix plans to expand sales of high-capacity eSSD and lead the market in the second half with 60 TB products, expecting eSSD sales to be more than quadrupled compared to last year. In addition, the company plans to continue its earnings growth by introducing competitive solutions to customers across its NAND product portfolio.

Separately, SK hynix is working on the construction of Cheongju M15X, which is under construction, with the goal of starting mass production in the second half of next year to cope with the growing demand for AI memory. In addition, the company plans to start construction of the first fab of the Yongin semiconductor cluster in March next year and complete it in May 2027 as scheduled.

SK hynix explained that although the yearly CAPEX might be higher than planned at the beginning of the year, the company will establish an investment plan by closely analyzing customer demand and profitability, while securing financial soundness by efficiently executing it within the operating cash flow.

"We were able to reduce the borrowings by 4.3 trillion won compared to the first quarter while making essential investments during the second quarter in line with its profitability-oriented investment stance." Chief Financial Officer Kim Woohyun said. "The company will further solidify the position as a leader in AI memory products by focusing on developing the best process technology and high-performance products based on a stable financial structure."