SK Hynix posted an operating profit margin of 76 percent in the second quarter of 2026. Revenue was 79.32 trillion won and operating profit was 60.54 trillion won, extending record quarterly results set in the previous quarter. Revenue rose 51 percent from the previous quarter and 256.8 percent from a year earlier. Operating profit increased 61 percent and 557.2 percent, respectively. The operating margin improved by 5 percentage points from the previous quarter.

On an earnings call held on Tuesday, the company said both DRAM and NAND flash posted sharp price increases as demand stayed strong on expanding AI infrastructure investment and supply conditions remained tight.

First-half revenue totalled 131.90 trillion won, topping 100 trillion won for the first time on a half-year basis. Cumulative operating profit was 98.15 trillion won, up 489.4 percent from 16.65 trillion won in the same period last year.

Depreciation and amortisation helped lift margins. SK Hynix said second-quarter depreciation and amortisation of intangible assets was 4 trillion won, about 5 percent of quarterly revenue. Earnings before interest, taxes, depreciation and amortisation was 64.60 trillion won and the EBITDA margin was 81 percent. Revenue surged after earlier capital spending had largely moved past the depreciation phase, diluting fixed-cost burdens.

Revenue growth was driven by prices. Hyunjong Song (송현종), head of SK Hynix's corporate centre, said DRAM shipments rose only in the high single digits in the second quarter, while the average selling price increased about 30 percent. NAND flash shipments rose in the mid-teens and the average selling price climbed in the mid-50 percent range. It was a quarter in which prices created profits under constrained supply conditions.

Product mix also contributed to margins. The company said second-quarter enterprise SSD (eSSD) revenue more than doubled from the previous quarter. Revenue from more than 30-terabyte high-capacity eSSDs at subsidiary Solidigm more than tripled. In DRAM, sales increased mainly for HBM3E and products for AI servers, and sales of server LPDDR products, including SOCAMM2, also rose. In NAND flash, 321-layer products accounted for the largest share of production, and the company plans to lift that share to about 50 percent of domestic production capacity by year-end.

Net margin 118 percent... 62 trillion won in non-operating gains reflected

Net profit was 93.90 trillion won and the net margin was 118 percent. The figure exceeds the operating margin as non-operating profit and loss were reflected. The company said net non-operating profit, including foreign exchange-related gains and gains from the disposal and valuation of investment assets, was 62.20 trillion won. Net profit before corporate income tax was tallied at 122.70 trillion won. There is a need to distinguish profit generated from its main business from non-operating profit.

Cash indicators also improved. Cash and cash equivalents stood at 88 trillion won at the end of the second quarter, up 33.60 trillion won from the end of the previous quarter. Borrowings fell 700 billion won to 18.60 trillion won, and net cash was 69.40 trillion won.

The company also disclosed contract structures aimed at stabilising results. SK Hynix said it completed negotiations on long-term supply agreements (LTAs) with more than 10 customers, including key clients. The contract term is typically five years, and includes financial safeguards such as customer purchase commitments and deposits to support performance. The company said it would operate LTAs at an appropriate level without disclosing their share of total sales.

Asked whether it could sustain the current margin, the company outlook was closer to saying it was not a one-off. Song said memory demand is broadening as AI evolves into agent forms that carry out complex tasks for long periods on behalf of users. He said demand is increasing not only for high-performance memory such as HBM but also for server DRAM that supports agent services and high-performance eSSDs that process AI outputs. The company defined this as a structural shift in which AI memory and general memory grow together.

The company also drew a line against the view that the spread of high-efficiency AI models could reduce infrastructure demand. It said efficiency gains lower the cost burden of AI services and barriers to adoption, widening the user base and use cases. Major customers are still requesting additional supply, the company said. In PC and mobile applications, temporary sales adjustments are emerging due to difficulty securing memory volumes.

The company forecast this year's market demand to rise in the mid-20 percent range for DRAM and the high-10 percent range for NAND flash. It said supply-demand conditions were unlikely to improve sharply in the short term due to rising difficulty in advanced processes and lead times for new production facilities.

For the third quarter, it plans DRAM shipments to increase about 10 percent from the previous quarter and NAND flash shipments to rise in the low single digits. Song expected bit growth in the second half to exceed the first half, citing expanded HBM4 volumes and increased shipments of general DRAM based on 1c nanometre. The company's investment plan for this year is in the high-40 trillion won range. The depreciation structure that supported margins this quarter is likely to change from the point when that investment is reflected in depreciation.