Published on: 2026-07-29
Updated on: 2026-07-29
Korea-listed 000660 fell about 10% after SK hynix reported a 557% rise in operating profit and a record 76% margin. Revenue and operating profit still missed consensus by about 6%, showing that expectations had risen faster than the company’s record earnings.
Nasdaq-listed SKHY had already fallen 9% in the preceding U.S. session. The Korean decline reflected concern that slower memory-price growth could pull margins and earnings forecasts lower.
Revenue reached ₩79.32 trillion and operating profit reached ₩60.54 trillion, yet both missed analyst forecasts by about 6%.
The record 76% margin depended on HBM demand and sharp DRAM and NAND price gains, leaving profit exposed to slower pricing.
HBM4 agreements with around 10 customers support future demand, while new capacity and CXMT’s DRAM expansion threaten broader memory pricing.
The next quarter must show that HBM4 growth can preserve margins as conventional-memory price increases lose momentum.
SKHY recently traded at a 34% premium over 000660’s converted value, adding downside risk as the gap between the two listings narrowed.
SK hynix stock fell because the quarter missed expectations, not because the memory business weakened.
| Metric | Q2 2026 | YoY change | Versus consensus |
|---|---|---|---|
| Revenue | ₩79.32tn | +257% | About 6% below |
| Operating profit | ₩60.54tn | +557% | About 6% below |
Operating profit best captures the core memory business. It reached a record ₩60.54 trillion, below analyst expectations of roughly ₩64 trillion. Revenue rose to ₩79.32 trillion against forecasts of about ₩84 trillion.
Analyst models already assumed exceptional HBM demand, elevated memory prices and strong manufacturing efficiency. A roughly 6% shortfall was enough to pull future earnings estimates lower. The scale of the decline reflected the expectations built into the earlier rally, not a sudden collapse in memory demand.
The decline in 000660 provides the clearest immediate reaction to the July 29 results because the Korean shares traded after the figures became public. SKHY’s 9% fall occurred in the preceding U.S. session during a wider semiconductor selloff.
SK hynix’s ordinary shares trade in Korea under 000660, while SKHY is the Nasdaq-listed American Depositary Share. Each SKHY ADS represents one-tenth of one Korean ordinary share.
The two securities reflect the same company but trade in different currencies, sessions and supply conditions. SKHY has carried a premium of more than 30% over the converted value of 000660 after Korean regulatory limits constrained additional ADS creation. A falling premium can pressure SKHY even when the operating outlook remains unchanged.
000660 and SKHY represent the same earnings stream, not the same daily trade.
The 76% operating margin is unlikely to become a normal baseline. HBM demand contributed, but sharp DRAM and NAND price increases also combined with stronger sales of AI-server DRAM and enterprise SSDs. Tight supply and a richer product mix allowed revenue growth to translate into much faster profit growth.
DRAM contract prices are expected to rise another 13% to 18% in the third quarter, while NAND prices may gain 10% to 15%. Both increases are slowing as consumer-device demand weakens and component costs test customers’ ability to absorb further increases. Profit growth can lose momentum even while memory prices continue rising.
A lower margin would not make SK hynix unprofitable. It would reduce forward earnings estimates, which is more important for the share price than whether current profit remains historically high. Semiconductor stocks often turn before industry revenue and earnings reach their cycle peaks.
HBM4 gives SK hynix its strongest protection against a broader memory slowdown, but it cannot carry the entire business alone. The company began mass shipments during Q2 and finalized long-term agreements with around 10 customers. Those agreements improve near-term demand visibility and reduce reliance on spot orders.
Capacity expansion will take longer to affect prices. SK hynix is accelerating M15X production and preparing the first Yongin cleanroom for early 2027. Samsung has begun commercial HBM4 shipments and is expanding production capacity, while Micron plans approximately $27 billion of capital expenditure in fiscal 2026.
New fabs require years to reach full output, which protects near-term pricing. Their production and depreciation eventually enter the income statement, raising the amount of AI demand required to preserve current margins.
CXMT threatens conventional DRAM before it threatens HBM. The Chinese producer accounted for about 9% of global DRAM shipments in early 2026, while its current expansion remains focused more heavily on mainstream DRAM than high-bandwidth memory. Further growth could weaken conventional-memory prices even if SK hynix retains its HBM lead.
HBM can remain scarce while conventional DRAM becomes easier to source. HBM4 can cushion weaker pricing, but it cannot prevent margin compression if industry supply grows faster than AI demand.
SKHY represents the same underlying company as Korea-listed 000660, but it is a Nasdaq-listed ADS rather than an ordinary share. Each ADS represents one-tenth of one Korean share. Currency movements, trading hours and limits on available ADS supply can produce different daily returns.
Net income reached ₩93.92 trillion against ₩79.32 trillion of revenue because investment gains boosted non-operating income. The gains included the impact of SK hynix’s Kioxia investment and related asset transactions. Operating profit of ₩60.54 trillion provides the cleaner measure of recurring semiconductor performance.
SK hynix supplies high-bandwidth memory used with Nvidia AI accelerators and works with Nvidia on next-generation memory technologies. That relationship supports HBM demand, but SK hynix’s total earnings also depend heavily on conventional DRAM, NAND and enterprise SSD pricing.
A delay in HBM4 qualification, weaker hyperscaler capital-expenditure guidance or greater customer concentration risk could lower future demand assumptions. SKHY also faces a separate risk if its premium over the converted value of 000660 contracts further.
SKHY supply is restricted because Korean ordinary shares cannot be freely converted into unlimited new ADSs. Strong U.S. demand therefore pushed SKHY above the currency-adjusted value of 000660. The premium exceeded 34% on July 23, although it can expand or contract independently of SK hynix’s earnings.
SK hynix no longer has to prove that AI memory is profitable. It has to prove that a 76% margin can survive slower pricing, rising depreciation and more industry supply. That margin, not another triple-digit growth rate, now carries SK Hynix stock.
