SK hynix Q1 Profit Soars 158% on AI Memory Demand

Seoul, South Korea - SK hynix Inc. reported on Thursday first-quarter operating profit of KRW 7.44 trillion (US$5.07 billion), its second-highest quarterly result, as demand for AI memory products bolstered performance despite seasonal weakness.

The world's second-largest memory chipmaker posted revenue of KRW 17.64 trillion (US$12.01 billion) in the January-March quarter, a 42% increase from a year earlier, though down 11% from the previous quarter. 

Net profit reached KRW 8.11 trillion (US$5.52 billion), up 323% year-on-year.

The operating margin improved to 42%, marking the eighth consecutive quarter of margin expansion.

The DRAM business, which accounted for 80% of the company's revenue in the first quarter, saw bit shipments decline by a high single-digit percentage quarter-on-quarter while average selling prices remained flat.

Bit shipments in its NAND flash business, which represented 18% of quarterly revenue, fell significantly from the previous quarter, with average selling prices decreasing by approximately 20%.

"In compliance with the 'Capex Discipline', SK hynix will focus on products with demand feasibility and profitability to enhance investment efficiency," said Woo-hyun Kim, Chief Financial Officer.

The company expects DRAM bit growth in the second quarter to increase by a "low-teen percentage" quarter-over-quarter, while NAND bit growth is projected to rise by more than 20%.

SK hynix maintained its forecast that HBM (High Bandwidth Memory) demand will approximately double compared to last year, with 12-layer HBM3E expected to account for over 50% of total HBM3E revenues in the second quarter.

At the end of the first quarter, the company's cash and cash equivalents increased by KRW 0.2 trillion to KRW 14.3 trillion (US$9.74 billion). 

The debt ratio improved to 29% from 31% in the previous quarter, while the net debt ratio declined to 11%.

SK hynix noted potential challenges ahead, citing "elevated macro uncertainties, such as tariff policy, that create volatility in 2H demand."

Capital expenditure plans include the ongoing construction of a fabrication plant in Yong-in, which commenced in the first quarter and is scheduled to be completed in the second quarter of 2027. 

The company's M15X fabrication facility remains on track to open in the fourth quarter of 2025.