SK Hynix reports record quarterly revenue driven by AI chip demand, with memory supply expected to remain constrained through 2029.
Macro & Markets ·
SK Hynix achieved record quarterly results, posting 104.6 trillion won in revenue and an 80% operating margin as artificial intelligence-driven demand for memory chips reached unprecedented levels. The company reported operating profit of 83.3 trillion won, with year-over-year increases of 328% in revenue and 632% in operating profit. This marked the first time the South Korean chipmaker's quarterly sales exceeded 100 trillion won, though net income declined sequentially due to non-operating charges including currency losses and investment write-downs totaling 32.6 trillion won.
SK Hynix signaled severe capacity constraints across its DRAM and high-bandwidth memory product lines, stating that inventories through 2029 are effectively committed and that overall demand will outpace supply through 2030. The company attributed persistent undersupply to the complexity of next-generation manufacturing processes and the extended timelines required to construct new production facilities. Customer demand reportedly exceeds current supply by more than double, with some clients adjusting specifications as a workaround for limited chip availability, particularly for AI accelerators.
To secure revenue amid tight supply, SK Hynix has locked in volumes through long-term contracts with 14 major customers—predominantly large cloud providers—that collectively reserve over 50% of production capacity for 2027 and 2028. These agreements typically span five years with price flexibility and deposit safeguards. Whether this level of forward contracting and the broadening of AI spending beyond major tech firms to government projects and enterprise deployments will sustain current pricing power remains uncertain.