SK Hynix misses street expectations despite 557% operating profit growth, 257% revenue surge

South Korean chip giant SK Hynix reported results for the most recent quarter, where its operating profit went up by 557% compared to the same quarter last year, while its revenue grew by 257% from the year-ago period. However, both parameters missed analyst expectations.

SK Hynix reported revenue of 79.32 trillion won or $54.55 billion, lower than estimates of 84 trillion won. Its operating profit stood at 60.54 trillion won, which also turned out to be lower than the 64 trillion estimate from analysts.

In comparison to the previous quarter, SK Hynix's revenue grew 51%, while its operating profit growth stood at 61%.

It was for the first time in the company's history that the cumulative revenue in the first half of the year crossed 100 trillion won.

In its post-earnings remarks, SK Hynix said that it saw sustained demand growth from expanding AI infrastructure investments, while high-performance products for AI servers saw a record rise in prices.

Prices for both DRAM and NAND flash memory saw a jump in comparison to the previous quarter. Sales growth was aided by focus on high-value-added products, including HBM, DRAM for AI servers, and enterprise SSDs.

The company expects memory demand momentum to persist as supply requests continue to mount from major tech companies, courtesy of their major spending plans.

Touting the power efficiency and cost competitiveness of its latest HBM4 chip, SK Hynix said that mass shipments for the same have begun in the second quarter and production will also ramp up in the second half of the year. Sample shipments of the HBM4E were also completed during the first half.

SK Hynix makes memory chips and supplies hardware components to clients ranging from data centers to consumer electronics like smartphones. It features Nvidia among its key clients, as the partnership recently expanded through a multi-year deal worth over $500 million.

Shares of SK Hynix have reversed the initial 2.5% advance after the results announcement, and are now trading only 0.5% higher. The stock led the chip sell-off on Tuesday, which led to the KOSPI plunging nearly 11%, extending its losses to 35% from its peak. SK Hynix shares are still up 130% for the year, despite a 47% plunge from its record high levels.