SK Hynix Posts Record Profit Yet Stock Slumps 47%

SK Hynix's record 60.54 trillion won operating profit missed estimates, triggering a 47% July collapse and historic KOSPI circuit breakers.

SK Hynix reported a record second-quarter operating profit of 60.54 trillion KRW ($41.9 billion), more than its total earnings for all of 2025, on revenue of 79.32 trillion KRW ($54.82 billion) — up 257% year over year — with an all-time-high 76% operating margin. Yet the result missed Wall Street consensus of 64 trillion KRW, and the stock fell 9.61% to 1,401,000 KRW in Seoul on the report date while ADRs dropped 8.98% to $130.17. ScanX reports the shares sank 47% in July, their worst monthly performance since June 2002, leaving them 53% below the 52-week high of 2,987,000 KRW.

The shortfall came from delays in shipments of certain advanced products that limited pricing gains in core DRAM, even as AI-driven demand remained intense. Sanjeev Rana, head of research at CLSA Securities Korea, called it a 'timing issue' as High-Bandwidth Memory shipments accelerate. ScanX reports net profit surged 1,242.5% to 93.92 trillion KRW, though 63.3 trillion KRW of that was a one-time gain from disposing of its Kioxia stake, with cash and equivalents at 88 trillion KRW. President Song Hyunjong dismissed oversupply fears, citing roughly 10 long-term agreements locking in future chip access.

The miss ignited a market-wide rout because Samsung Electronics and SK Hynix together account for more than half the KOSPI's weighting, making the index a direct proxy for AI hardware sentiment. ScanX reports the KOSPI fell over 12.6% in two days — its worst such decline in history — with circuit breakers triggering on consecutive sessions and the Kosdaq halting for 20 minutes; nine of the KOSPI's 15 circuit breakers since 2000 have come this year. Over 1.2 million leveraged accounts breached margin call thresholds by July 13, with 2.3 trillion KRW in forced liquidations from May to mid-July, and retail investors sold 1.7 trillion won on Wednesday alone.

ScanX reports SK Hynix raised its full-year 2026 capital expenditure guidance to the high end of a 40 trillion KRW range to expand AI memory capacity, and expects third-quarter DRAM shipments up about 10% and NAND up about 3%, with analysts anticipating a further 30% sequential profit increase as HBM4 shipments accelerate. The key watch items are whether HBM4 acceleration restores pricing power and whether concerns about Chinese rival ChangXin Memory Technologies' potential capacity expansion continue to weigh on the sector.