SK Hynix reported first-quarter revenue of 52.6 trillion won, a significant sequential increase of 60.2%. Operating profit reached 37.6 trillion won, nearly doubling from the previous quarter. The overall performance was largely in line with the latest market consensus.
A report from Bernstein on April 23 highlighted that SK Hynix's Q1 2026 results demonstrate that the strength in memory chip pricing is not a temporary phenomenon. The company emphasized that the supply shortage is structural in nature, indicating that the current favorable pricing environment is expected to last longer than in previous cycles.
Notably, driven by a revaluation gain from its Kioxia equity stake, net profit surged to 40.3 trillion won, soaring 164.6% quarter-on-quarter and significantly exceeding expectations. The company's guidance suggests that both DRAM and NAND bit shipments are set to recover in the second quarter, pointing to a continued positive trend in the memory market.
Looking ahead, SK Hynix anticipates that demand for High Bandwidth Memory (HBM) will far exceed its own supply capacity over the next three years. The company plans to substantially increase its full-year capital expenditure for 2026 compared to the previous year.
**Strong Pricing Reflects Structural Shortage** In the first quarter, SK Hynix's average selling price (ASP) for DRAM increased in the mid-60% range sequentially, while the ASP for NAND rose in the mid-70% range. For comparison, Micron's DRAM ASP also saw an increase in the mid-60% range during the same period, and its NAND ASP rose in the high-70% range, showing a highly consistent pricing trend between the two companies.
SK Hynix explicitly stated that the current memory supply shortage is a structural issue, with customers generally prioritizing supply security over price pressure. Consequently, the company believes the strong pricing environment will persist longer than in past cycles, and periodic dips in spot prices do not signal that the current cycle has peaked.
From a profitability perspective, this view is well-supported: SK Hynix's overall gross margin reached 79.3% in Q1. The DRAM gross margin climbed into the mid-80% range, and the NAND gross margin potentially surpassed 60%. The company's overall gross margin level has clearly exceeded the historical peak seen during 2017-2018.
**Sustained HBM Demand Outstrips Supply** The HBM business was the core driver behind the better-than-expected DRAM revenue this quarter.
SK Hynix stated that HBM demand over the next three years will significantly outpace its own supply capability. The company plans to maintain a balanced allocation of capacity between HBM and traditional DRAM.
Regarding the product roadmap, mass production of HBM4 will proceed according to customer schedules, though specific timelines were not disclosed. HBM4E entered the customer sampling phase in the second half of 2026 and is scheduled for mass production in 2027.
In terms of bit shipments, DRAM bit shipments were flat sequentially in Q1, falling short of Bernstein's initial forecast for growth. NAND bit shipments declined by approximately 10% quarter-on-quarter.
The company guides for a high-single-digit percentage increase in DRAM bit shipments for Q2. NAND bit shipments are also expected to rebound from the previous quarter's decline.
**Significant Capex Increase for Planned Expansion** SK Hynix guides for a significant year-on-year increase in full-year 2026 capital expenditure, though a specific amount was not disclosed.
Bernstein forecasts full-year capex to be around 420 billion won (approximately 420 trillion won scale), higher than the 275 billion won spent in 2025. The company indicated that expenditures will focus heavily on infrastructure construction and strategic equipment procurement.
Regarding specific capacity plans, the first phase cleanroom at the Yongin First Fab (Y1) is expected to be completed in February 2027. It is planned for DRAM production, with the overall project comprising six phases in total.
For NAND, SK Hynix is expanding capacity through technology upgrades, planning to migrate 50% of its domestic production capacity to the 321-layer stacking process by the end of 2026.
Although Q1 capital expenditure decreased sequentially, primarily due to seasonal factors, it remained significantly higher than levels seen in most quarters of 2025.
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