SK Hynix 1Q 2026 Earnings Preview: Memory Chip Prices Surge, Profit Set to Double

TradingKey - Memory giant SK Hynix is set to report its fiscal first-quarter 2026 results on Thursday, as the market holds high expectations for its performance.

According to average analyst estimates compiled by FactSet, the South Korean memory chip giant's net profit for the quarter ending in March is expected to grow by more than 200% year-on-year to a record high of 28.109 trillion won (approximately $189.6 billion); revenue is projected to double year-on-year to 50.531 trillion won, while operating profit is also expected to climb to a record 35.765 trillion won.

SK Hynix shares have surged more than 80% year-to-date, crossing the 1.22 million won threshold for the first time on Tuesday to hit a fresh record high.

Performance Review

Looking back at the previous quarter, SK Hynix delivered results that far exceeded market expectations, with quarterly operating profit reaching 19.2 trillion won (approximately $13.5 billion), a year-on-year increase of over 100%. Revenue also rose to 32.8 trillion won, a performance that further solidified the core position of memory chips in the AI supply chain.

For fiscal year 2025, SK Hynix's full-year revenue reached 97.1 trillion won, with operating profit at 47.2 trillion won (a 49% margin) and net profit at 42.9 trillion won—all three core metrics setting new historical records.

The HBM (High Bandwidth Memory) business became the strongest engine driving growth, with annual revenue increasing by over 200% year-on-year. SK Hynix was the first to achieve mass production of HBM4 in September 2024 and is steadily advancing deliveries in line with customer demand. The NAND flash business also performed remarkably well, completing the development of 321-layer QLC products while its annual revenue hit a record high.

Memory Chip Demand May Drive Profits to New Highs

AI memory chips are becoming the core engine for SK Hynix's performance explosion and are driving the global memory industry into a rare supercycle.

Driven by strong demand for AI computing power, SK Hynix's first-quarter operating profit is expected to reach a record high, nearly double its previous record, backed by robust sales of high-value-added products like HBM as well as sharp surges in DRAM and NAND Flash prices.

According to data from TrendForce, DRAM contract prices surged 90% to 95% quarter-on-quarter in the first quarter of 2026, while NAND Flash contract prices also rose 55% to 60%, with the upward trend expected to continue in the second quarter—DRAM is projected to rise another 58% to 63%, and NAND Flash increases could reach as high as 70% to 75%.

Micron Technology ( MU )'s previously released earnings report has already confirmed this trend; its fiscal 2026 second-quarter revenue reached $23.86 billion, exceeding its own guidance by 27%, while non-GAAP operating profit reached $16.5 billion, beating expectations by approximately 46%, demonstrating the industry's strong profitability resilience.

Currently, capacity from newly built cleanrooms in the industry will not be converted into effective supply until late 2027 or 2028 at the earliest, making the short-term capacity gap difficult to bridge. Against this backdrop, Google ( GOOGL ), Microsoft ( MSFT ), and other AI cloud service giants have signed five-year long-term procurement agreements with memory manufacturers to lock in supply in advance, which also means that the supply shortage in the commodity memory market will persist for an extended period.

IDC analyst Jitesh Ubrani stated clearly, "Storage shortages will continue until 2027. Even if prices pull back from 2028, they will not return to 2025 levels." This means that the memory industry's high prosperity cycle will continue for at least the next two years.

Multi-dimensional strategic push into the AI storage market

To capitalize on the explosive growth opportunities in the AI memory market, SK Hynix is advancing its globalization strategy across multiple dimensions, including capacity expansion, technological deployment, and capital operations.

On April 22, the South Korean memory giant announced it would invest 19 trillion won (approximately $12.85 billion) to build a new advanced packaging facility domestically, with construction set to begin within this month. The facility will focus on advanced packaging processes for AI memory chips—a critical manufacturing stage for core AI memory products such as High Bandwidth Memory (HBM). Once operational, it will further consolidate the company's capacity advantage in the AI memory sector.

As a core supplier to Nvidia ( NVDA ), SK Hynix has not only brought a new memory chip factory in South Korea online ahead of schedule but also announced on April 20 that mass production of its SOCAMM2 memory modules, designed specifically for Nvidia's next-generation Vera Rubin AI chips, has begun. This new product fundamentally addresses memory bottlenecks in Large Language Model (LLM) training and inference. Compared to traditional RDIMM2 products, it more than doubles the bandwidth and improves power efficiency by over 75%, providing a superior solution for high-performance AI computing.

Simultaneously with its accelerated capacity expansion, SK Hynix is also advancing its presence in the U.S. capital markets, with plans to list American Depositary Receipts (ADRs) between June and July. The company has already clarified its listing timeline with underwriters and confidentially filed an F-1 registration statement with the U.S. Securities and Exchange Commission (SEC) last month.

Markets expect the IPO to raise approximately $10 billion, with proceeds primarily allocated to AI memory capacity expansion and R&D, including long-term strategic projects such as the Yongin semiconductor cluster in South Korea.

Institutional consensus turns bullish

Samsung Securities issued a research note on April 21, hiking its price target for SK Hynix to 1.8 million won. The firm's analyst, Lee Jong-wook, noted that the momentum of the current upcycle is expected to see a longer-term structural continuation, which differs fundamentally from previous cycles—the DRAM industry is transitioning from a price-driven, economically sensitive business to a quality-first, infrastructure-style business.

Furthermore, South Korea's Maeil Business Newspaper reported that IBK Investment & Securities has significantly raised its target price for SK Hynix from 1.1 million won to 1.8 million won. Several other institutions, including KB Securities (1.9 million won), SK Securities (2 million won), LS Securities (1.5 million won), and Meritz Securities (1.7 million won), have also recently revised their targets upward.

However, investors also need to monitor potential risk factors, such as shifts in global trade policy, intensifying industry competition, and structural changes in memory demand driven by AI technology. Overall, against the backdrop of a continued explosion in AI computing demand and tight supply-demand conditions for memory chips, the visibility of SK Hynix's earnings growth remains high.