South Korean media: SK Hynix breaks records again… Operating profit margin reaches 72%, ranking first globally

¬ Achieved record-high operating profit of KRW 3.7 trillion in Q1

SK Hynix set new historical highs for both sales and operating profit in the first quarter of this year (January–March), securing the top position in operating profit margin among major manufacturing and service companies worldwide. Operating profit margin, a key profitability indicator measuring the health of a company’s operations, is calculated by dividing operating profit by sales revenue.

SK Hynix announced on the 23rd that its sales rose 198% year-on-year to KRW 5.2576 trillion (approximately RMB 24.24 billion), while operating profit surged 406% to KRW 3.7603 trillion (approximately RMB 17.34 billion). This marks the first time SK Hynix has surpassed KRW 50 trillion (approximately RMB 23.05 billion) in quarterly sales and KRW 30 trillion (approximately RMB 13.83 billion) in operating profit. The operating profit is more than double that of the previous quarter (KRW 1.91696 trillion, approximately RMB 8.84 billion), with both sales and operating profit achieving four consecutive quarters of record highs.

The operating profit margin reached 71.5%, an exceptionally rare achievement in the manufacturing sector. This means that for every KRW 1,000 (approximately RMB 4.61) worth of semiconductors sold, after deducting costs and labor expenses, there remains a surplus of KRW 715 (approximately RMB 3.30). This performance surpasses the record set during the semiconductor super cycle in Q3 2018 (56.7%) and also exceeds Micron Technologies from the U.S., which recently reported an operating profit margin of 67.6%. In 2025, the average operating profit margin for companies listed on South Korea’s KOSPI index was 7.94%. SK Hynix’s exceptional profitability stems largely from its technological leadership in high-value-added products such as HBM. An industry insider said: “We specialize in producing the most expensive and most in-demand memory—HBM—and have secured key clients like NVIDIA by being first to market.”

Global #1 Operating Profit Margin

Our analysis compared the latest financial results of manufacturing and service firms within the S&P 100 and Nasdaq 100 indices. The findings show SK Hynix ranks first globally in operating profit margin. NVIDIA, directly benefiting from the AI boom (November 2023–January 2024), reported an operating profit margin of 65%. SK Hynix outperformed Taiwan’s leading foundry giant TSMC (58.1%). Even tech giants like Google (31.6%), Apple (35.4%), Meta (41.3%), and Microsoft (47.1%) recorded operating profit margins between 30% and 40% in their most recent quarter. A tech industry expert noted: “Micron forecasts its gross margin (profit margin after subtracting costs from sales) for the next quarter will reach 81%, indicating that profits at memory chip companies will continue to expand.”

As AI applications grow increasingly widespread, demand for memory chips is surging. From training AI models using vast datasets, to AI performing inference directly, to AI evolving into intelligent agents (like digital assistants) capable of autonomous planning, judgment, and execution—demand for all types of memory products is skyrocketing. Not only is high-bandwidth memory (HBM) for AI accelerators in short supply, but now even server DRAM, NAND flash used for data storage and auxiliary inference, and low-power DRAM embedded in smartphones or individual IT devices are facing severe supply shortages.

SK Hynix stated on the same day: “The average selling price of DRAM in Q1 increased by over 60% compared to the previous quarter, while NAND flash prices rose by more than 70%.”

"The Future Will Be Brighter"

SK Hynix’s forecasted performance for Q2 (consensus estimates) stands at sales of KRW 6.9503 trillion (approximately RMB 32.06 billion) and operating profit of KRW 5.12795 trillion (approximately RMB 23.64 billion). With ongoing semiconductor shortages, long-term supply agreements (LTAs) requiring advance payments are becoming increasingly common to secure supply. As semiconductor firms remain cautious about a potential “peak and decline” scenario following past super cycles, supply management efforts are underway, suggesting further upward pressure on memory chip prices.

Regarding the delayed delivery of NVIDIA’s HBM4, SK Hynix said: “We are closely collaborating with our client to ensure timely supply according to their mass production schedule.” Additionally, SK Hynix revealed plans to provide samples of its seventh-generation HBM—HBM4E—to NVIDIA and other clients later this year. The company will also proceed with listing on the U.S. stock market through American Depositary Receipts (ADRs) within the year.

Source: Chosun Ilbo

Original article: toutiao.com/article/1863323338815507/

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