Market Brief · Two Views on MemoryA record profit — and yet the stock fell:two ways of seeing memory

SK hynix posted its highest-ever profit, but the shares declined. The boom view and the China-catch-up view

📊 SK hynix Q2 operating profit KRW 60.5tn — a quarterly record / Yet below consensus (~KRW 64.7tn) · shares fell ~6% / China’s CXMT debut a hit — DRAM ambitions in earnest

On July 29, SK hynix reported a Q2 operating profit of KRW 60.5426 trillion — a quarterly record. An operating margin of 76%, net profit of KRW 93.9 trillion. And yet the shares fell around 6% on the Nextrade platform right after the announcement, because the result came in below consensus (operating profit of roughly KRW 64.7 trillion).

That scene captures the two views running through the memory market right now. One holds that the AI-driven memory boom is still under way. The other holds that expectations have already run too high, and China’s DRAM push signals intensifying competition.

SK hynix Q2 — in numbers

KRW 60.5tn

Q2 operating profit

a quarterly record

+557% year over year

76%

Operating margin

up from 71% in Q1

Second only to Micron among big tech

~-6%

Shares right after the print

(Nextrade platform)

Below the ~KRW 64.7tn consensus

Revenue+50.8% QoQ · +257% YoY KRW 79.3tn

Operating profit+60.9% vs Q1 (KRW 37.6tn) · a record KRW 60.5tn

Net profit net margin 118% KRW 93.9tn

Cash and equivalents up KRW 33.6tn from the prior quarter-end KRW 88tn

※ The company said both DRAM and NAND recorded sharp price increases, and it lifted sales of high-value products — HBM, AI-server DRAM, eSSD — to generate its best-ever profitability. First-half cumulative revenue topped KRW 100 trillion for the first time.

Two views — same result, different reading

🟢 Bull — the boom continuesAI demand is rewriting profits

-. A record quarterly profit. Operating profit +557% and revenue +257% YoY; first-half revenue past KRW 100 trillion

-.Prices keep rising. Both DRAM and NAND rose sharply again; HBM and AI-server high-value products led the increase

-.Margins rare for manufacturing. A 76% operating margin, above Nvidia (65.6%) and TSMC (60.3%)

-.Demand visibility. Recent multi-year supply cooperation, including the Korea-US pact, underpins the demand pipeline

-.HBM lead intact. In high-value HBM, Korean firms are still widely seen as ahead

🔴 Bear — expectations and competitionA record profit, and still the stock fell

-. Below consensus. Even at a record, it missed expectations (~KRW 64.7tn operating profit), and shares fell ~6% right after

-.China’s DRAM push. CXMT’s listing was a first-day hit, lifting it to fourth globally; commodity DRAM is growing fast (3-year revenue CAGR 160.8%)

-.Narrowing tech gap. Per an Export-Import Bank of Korea report, the DRAM technology gap with leaders has closed to around three generations

-.Price offensive. CXMT is supplying DDR4 at around half the market price to expand share in older DRAM

-.High expectations are themselves a risk. With the boom already priced in, correction pressure can build absent a surprise

※ The two views are not mutually exclusive. Most analysis holds that Korean firms keep their lead in high-value areas like HBM while China catches up fast in commodity DRAM. CXMT’s HBM capability is widely seen as several generations behind. In other words, “boom” and “intensifying competition” can run at once in different product tiers.

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