SK Hynix Q2 Report: Record Revenue, 25% Net Margin

SK Hynix has announced its financial performance for the second quarter of fiscal year 2024, ending June 30, 2024. The company achieved consolidated revenues of KRW 16.423 trillion, operating profits of KRW 5.468 trillion, and net profits of KRW 4.12 trillion. The operating profit margin reached 33%, while the net profit margin stood at 25%.

These results mark a new high for quarterly revenue, exceeding the previous record of KRW 13.811 trillion set in Q2 2022. Operating profits also reached KRW 5 trillion, a level not seen since the semiconductor boom of Q2 and Q3 2018.

The strong financial performance is attributed to robust demand for AI-related memory solutions, including High Bandwidth Memory (HBM) and enterprise Solid-State Drives (eSSD). The rise in DRAM and NAND flash product prices contributed to a 32% quarter-over-quarter revenue increase. The shift towards high-end products, combined with favorable currency effects, led to a 10 percentage point improvement in operating profit margin to 33%.

In the DRAM sector, SK Hynix has expanded its sales of high-value products such as HBM3E and server DRAM since March 2024. HBM sales alone grew by over 80% from the previous quarter and more than 250% year-over-year, significantly enhancing the company's performance.

NAND flash sales also saw substantial growth, particularly in enterprise SSDs and mobile applications. eSSD sales surged approximately 50% quarter-over-quarter, while the average selling price (ASP) of NAND flash products has been on the rise since Q4 2023, contributing to profitability for two consecutive quarters.

Looking forward to the second half of 2024, SK Hynix anticipates continued strong demand for AI server memory and new high-performance storage solutions for PCs and mobile devices. The company plans to begin mass production of 12-layer HBM3E samples in Q3 to maintain its leadership in the HBM market.

Additionally, SK Hynix remains the exclusive provider of the highest capacity 256GB DDR5 DRAM for servers. The company is set to introduce 32Gb DDR5 DRAM and Multiplexer Combined Ranks Dual In-line Memory Modules (MCRDIMMs) for high-performance computing later this year. MCRDIMMs enhance processing speed by operating multiple DRAM ranks simultaneously.

In the NAND flash domain, SK Hynix will increase its focus on high-capacity enterprise SSDs, with plans to lead the market with 60TB products. The company projects a fourfold increase in enterprise SSD revenue compared to last year and aims to offer competitive solutions through a comprehensive NAND flash product portfolio.

To meet the growing demand for AI-related memory, SK Hynix is advancing the construction of its Cheongju M15X plant in South Korea, with mass production slated to begin in the second half of 2025. The Yongin semiconductor cluster is also under development, with the first factory scheduled to start construction in March 2025 and completion expected by May 2027.