SK Hynix's Record 37.6 Trillion Won Profit Fuels a 7.35 Trillion Won Capacity Splurge

SK Hynix posts record Q1 operating profit of 37.6 trillion won, driven by AI chip demand, with plans for massive capacity expansion and potential $1 trillion market cap milestone.

SK Hynix has reported a first-quarter operating profit of 37.6 trillion won, more than doubling the previous quarter's result, as the chipmaker ramps up capital spending to 7.35 trillion won to keep pace with insatiable AI demand. The investment splurge, up 22% from a year earlier, is mostly directed at new fabrication lines and packaging facilities, including its Yongin semiconductor cluster and a $3.87 billion plant in Indiana.

The market has rewarded the strategy handsomely. Shares have surged 171% since the start of the year, trading at 1.84 million won — just 7% below their all-time high set in early May. At this trajectory, SK Hynix is on the verge of becoming the second South Korean company to reach a $1 trillion market capitalisation, a milestone that would cement its transition from a cyclical memory supplier to a structural AI infrastructure provider.

The record quarter saw revenue top 50 trillion won for the first time, with an operating margin of 72% — exceptional for a typically slow first quarter. Goldman Sachs forecasts full-year operating profit of 202 trillion won. KB Securities has raised its outlook sharply, predicting a 78.1% margin for 2026 that would put SK Hynix ahead of Nvidia and Saudi Aramco on profit margins.

Analysts describe a "zero supply" era for advanced memory chips, with no new production lines coming online until 2027. That tightness is driving contract prices sharply higher. TrendForce expects second-quarter DRAM prices to jump 58–63% quarter-on-quarter, with NAND flash rising 70–75%. KB Securities sees DRAM prices climbing 194% and NAND prices 244% for the full year. Long-term supply agreements stretching to 2028 and 2030 are locking in revenue visibility, making the business model resemble that of a contract manufacturer.

The biggest threat to SK Hynix's dominance is Samsung's progress on HBM4. While SK Hynix's yield on the next-generation memory has reached 80%, Samsung's is still below 60%. However, Samsung has secured qualification for Nvidia's Vera Rubin platform. If it achieves mass production of HBM4 in the second half of the year, SK Hynix's market share could slip to 50–60%. To stay ahead, SK Hynix is pursuing a potential collaboration with Intel on 2.5D packaging technology, an alternative to TSMC's capacity-constrained CoWoS process, though neither company has confirmed the tie-up.

Capacity is being expanded on multiple fronts. The M15X fab in Cheongju is set to begin production later this year. In Indiana, a new packaging factory is scheduled for 2028. Meanwhile, work on the Yongin cluster is being accelerated. On the technology front, SK Hynix is already preparing HBM4E, with samples due in the second half of 2026 and mass production in 2027 using the finer 1c-nanometer process. The company is also focusing on high-margin server DRAM and enterprise SSDs to capture the demand surplus.

Crossing the trillion-dollar market cap would be more than symbolic. It would validate SK Hynix's transformation from a commodity memory maker into a key supplier of the AI ecosystem. With margins that now surpass those of Nvidia, and a capacity build-out that stretches years into the future, the company is no longer at the mercy of memory cycles — it is shaping the infrastructure of artificial intelligence.