SK Hynix - Q1 2026 Earnings Analysis

Performance Highlights

SK Hynix reported Q1 2026 revenue of KRW 52.6 trillion, up 60% QoQ and 198% YoY, surpassing the KRW 50 trillion quarterly threshold for the first time in company history. Operating profit reached KRW 37.6 trillion, nearly doubling QoQ, with an operating margin of 72% — both all-time quarterly records — while net profit of KRW 40.3 trillion translated to a 77% net margin.

The dominant driver was a simultaneous surge in both DRAM and NAND pricing, with DRAM ASP rising mid-60% QoQ and NAND ASP rising mid-70% QoQ, amplified by a deliberate mix shift toward high-value products including HBM, 128GB-and-above server modules, and enterprise SSDs. NAND shipments declined roughly 10% QoQ due to mix-driven production lead time effects, while DRAM shipments held flat QoQ, yet the pricing and mix tailwinds were sufficient to drive EBITDA of KRW 41.3 trillion at a 79% margin.

Management Outlook and Forward Catalysts

Management guided Q2 DRAM shipment growth of high-single-digit percent QoQ and NAND shipment growth of mid-teens percent QoQ, signalling continued demand absorption as AI infrastructure investment broadens from HBM into server DRAM modules and enterprise SSDs. The company plans to ramp HBM4, begin mass supply of 1c nm LPDDR6 in H2, and accelerate NAND migration to 321-layer technology, targeting more than 50% of domestic output by year-end, while CapEx is set to rise significantly YoY with the majority directed at the Yongin cluster and EUV equipment procurement.

The central investor debate heading into Q2 is whether the structural pricing upcycle can hold as spot market softness raises peak-cycle concerns, and whether HBM4 qualifications with key customers will proceed on schedule to sustain SK Hynix's market share lead. Bulls point to multi-year LTA discussions, demand exceeding supply across all product lines, and a net cash build toward KRW 100 trillion; bears watch for PC and mobile demand erosion, potential memory-efficiency technologies compressing per-device usage, and the execution risk of ramping the Yongin cluster amid geopolitical supply chain pressures.