Semiconductor maker SK hynix posts strong profits
SEOUL, April 24 (UPI) -- South Korean semiconductor manufacturer SK hynix said Thursday its operating profit in the first quarter was $25 billion, up fivefold from a year ago.
The world's No. 2 memory chipmaker nearly tripled its sales in the January-March period to $35.6 billion year-on-year for an unprecedentedly high operating profit margin of 72%.
Global bellwether Samsung Electronics is also estimated to have posted $34 billion in the first-quarter operating income in the semiconductor sector. It is scheduled to release detailed earnings later this month.
"Although the first quarter is typically a seasonally slow period, robust demand based on expanding investment in artificial intelligence infrastructure offset seasonal weakness, thus allowing tight supply conditions to persist," SK hynix Chief Financial Officer Kim Woo-hyun told a conference call.
"As a result, prices for both DRAM and NAND rose sharply during the quarter, with server DRAM and enterprise solid-state drives leading the price increases," he said.
Kim said that technological development in memory efficiency is not reducing demand, but rather instead amplifying it.
"While memory efficiency technologies may appear to reduce memory usage per device, in reality they are maximizing the amount of contextual information and the number of users that can be handled per unit of memory," Kim said.
"This trend is expected to improve the economics of AI services, expand the overall size of the AI services market, and create a virtuous cycle that further fuels memory demand," he predicted.
Rising share price
Market observers point out that the record performance was boosted by the soaring demand for memory chips like the advanced high-bandwidth memory, or HBM, on the back of the large-scale, AI-related investments, including data centers.
They project that the semiconductor upcycle will not end overnight because demand continues to outstrip supply. Supply shortages remain difficult to resolve, and there are few signs of weakening demand.
"The core issue lies on the supply side. The problem is not simply that the market is currently facing a shortage, but that there is no clear supply roadmap capable of eliminating that shortage anytime soon," Samsung Securities analyst Lee Jong-wook said in a report.
"Capital expenditures continue to be revised upward, yet supply growth in the memory market is still falling short of demand. In addition, much of this year's increase in capex has been directed toward infrastructure rather than equipment, suggesting shortages are unlikely to ease in the near future," Lee said.
DAOL Investment Securities analyst Ko Young-min concurred.
"Supply shortages across the broader memory semiconductor market are likely to persist through the second half of 2026, while rising computing demand powered by the spread of AI is likely to continue over the next two to three years," he said in a report.
"Against a backdrop of structural supply-demand imbalance, we are in a phase where earnings estimates are being revised upward," he said.
In this climate, brokerage houses both at home and abroad are racing to lift their price targets for SK hynix.
After the announcement of SK hynix's first-quarter results, many securities companies expected that the share price of SK hynix could rise more than 60% to $1,350. Nomura Securities even jacked up the target price to $1,600.
"Just a year ago, few expected that memory shortage would boost the profitability and stock prices of Korean chipmakers like this. I don't think that even sales managers of SK hynix and Samsung Electronics predicted it," Economic commentator Kim Kyoung-june, formerly Vice Chairman of Deloitte Consulting Korea, told UPI.
"To be frank, this is an unexpected windfall for them. Our companies are required to use the surplus cash generated by strong profits to intensify investment in technologies aimed at shaping the next five to 10 years," he said.
The share price of SK hynix edged up 0.16% on the Seoul bourse Thursday and dipped 0.24% on Friday.
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This story was originally published April 24, 2026 at 8:01 AM.