SK Hynix's 72% Operating Margin Tops Nvidia as Supply Constraints and a Samsung Walkout Reshape the Memory Landscape

SK Hynix posts record 72% operating margin, beating Nvidia, as HBM supply tightens; Samsung strike threatens rivals, driving stock up 57% in 30 days.

SK Hynix has achieved what few hardware manufacturers ever have: an operating margin that surpasses even Nvidia's. In the first quarter of 2026, the South Korean memory giant posted an operating profit of 37.61 trillion won on revenue of 52.58 trillion won, yielding an operating margin of 72% — seven percentage points ahead of Nvidia's 65%. The numbers reflect a market where demand for high-bandwidth memory (HBM) has outstripped supply to an extraordinary degree.

The company's order books are effectively sold out. SK Hynix has already committed its entire HBM production for 2026 to customers, and executives acknowledge that not all client orders can be fulfilled. The next available capacity will not come online until late 2026 at the earliest, when the M15X fab in Cheongju begins mass production in November. That facility, which cost more than 20 trillion won, will produce HBM3E, HBM4, and DRAM for the next-generation HBM4E. A larger plant in the Yongin cluster is not expected to reach full operation until May 2027, adding roughly 350,000 wafers per month and lifting total capacity to 900,000 wafers.

That supply drought is now compounded by potential disruption at SK Hynix's biggest domestic rival. Samsung Electronics faces a strike by more than 50,000 workers starting May 21, with the walkout expected to last 18 days. The timing could not be more delicate: Samsung began mass production of sixth-generation HBM chips in February, and those components are critical for Nvidia, AMD, and Google as they build out their latest AI accelerators. Any output interruption at Samsung could force these buyers to lean even harder on SK Hynix.

The threat has not gone unnoticed by the market. SK Hynix shares closed Monday at 1,840,000 won, up 57.8% over the past 30 days and 171.8% since the start of the year. The relative strength index (RSI) has climbed to 68.9, edging toward overbought territory and raising the risk of profit-taking on any disappointment. Yet the analyst community sees further upside.

Nomura recently doubled its price target to 4 million won, arguing that SK Hynix has transformed from a cyclical memory maker into a structural growth story. KB Securities and SK Securities both set targets of 3 million won, with SK Securities noting an expected price-to-earnings ratio of roughly 5.2 — a valuation that, in their view, fails to capture the sustained pricing power. UBS raised its target to 1.7 million won and sharply increased earnings estimates for 2026 and 2027.

That pricing power stems from a rare alignment of forces. Goldman Sachs widened its forecast for the 2026 DRAM supply gap from 3.3% to 4.9%, and market researchers do not expect meaningful price relief until after 2027. Major tech customers, desperate to secure HBM allocation, have offered to co-finance new production lines and expensive equipment. SK Hynix's management has been cautious about accepting such offers, wary of locking capacity into long-term, single-customer arrangements that could weaken future pricing flexibility.

On the technical front, SK Hynix holds a clear edge. Its 1c-nanometer DRAM process already achieves an 80% yield rate, while Samsung's HBM4 process remains below 60%. The company's upcoming HBM4E memory, which promises 11% more speed and 9% better energy efficiency per watt, is on track to deliver first samples in the second half of 2026, with mass production slated for 2027. The core chip will use the same advanced 1c process.

The talent pipeline reflects this competitive advantage. Over the past four months, roughly 200 engineers have moved from Samsung to SK Hynix, drawn in part by a profit-sharing agreement that distributes 10% of operating income to employees. Meanwhile, SK Hynix is also broadening its capital markets presence: the company has confidentially filed documents for an American depositary receipt (ADR) listing in the United States, targeting the second half of 2026.

Research and development spending has surged accordingly. In the first quarter alone, R&D outlays reached 2.55 trillion won, up 68.3% from a year earlier. For the full year, the company has earmarked 50 trillion won for capital expenditure and R&D combined, compared with 36.6 trillion won in the prior year.

The longer-term risk remains Samsung's ability to close the gap. Should the rival successfully ramp HBM4 production in the second half of 2026, SK Hynix's market share could slip from its current dominance to between 50% and 60%. But for now, the combination of sold-out capacity, a rival's labor strife, and a structural shift in memory demand has put SK Hynix in a position few chipmakers have ever enjoyed. The strike scheduled for May 21 will serve as an early test of just how fragile — and how profitable — that position truly is.