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$000660 - SK Hynix Inc

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$000660

🔹 Revenue: ₩17.64T (Est. ₩17.2T) 🟢; UP +42% YoY

🔹 Operating Profit: ₩7.44T (Est. ₩6.62T) 🟢; UP +158% YoY

🔹 Net Income: ₩8.11T (Est. ₩5.04T) 🟢; UP +323% YoY

🔸 Overtook Samsung to become global No.1 in DRAM revenue and profitability in Q1

Segment & Operational Highlights:

🔹 DRAM Revenue Share: ~80%

🔹 DRAM Profitability Improved QoQ despite seasonal price weakness

🔹 NAND: Maintained profitability despite declining prices and volumes

🔹 Cash & Equivalents: ₩14.3T (UP ₩0.2T QoQ)

🔹 Debt Ratio: 29%, Net Debt Ratio: 11%

🔹 Operating Margin: 42% (vs. 23% YoY); UP +19pp YoY

🔹 Net Margin: 46%

Outlook & Guidance:

🔹 Q2 DRAM Sales: Expected to grow low-teens % QoQ

🔹 Q2 NAND Sales: Expected to grow over 20% QoQ

🔹 Maintains HBM demand projection: To double YoY in FY25

🔹 Capex: Slight increase YoY; remains disciplined and focused on ROI

🔹 eSSD Trend: Shift from 61TB to 122TB; developing 244TB QLC eSSD

🔹 AI-optimized eSSD demand (QLC/TLC) remains strong due to data center needs

Market Position:

🔹 Overtook Samsung to become global No.1 in DRAM revenue and profitability in Q1

🔹 HBM3E 12-layer chips to exceed 50% of HBM3E sales in Q2

🔹 Leading early mass production and customer qualifications for HBM4

🔹 DRAM mix shifting toward DDR5, 24Gb/32Gb chips

Strategic Developments:

🔸 Continued expansion of M15X fab to support AI memory scaling

🔸 AI-driven demand and DeepSeek models supporting long-term HBM growth

🔸 Entered LPCAMM2 production for AI PCs; SOCAMM2 for servers to follow

🔸 Strengthening supply chain collaboration amid global uncertainty

🔸 Proactive response to tariff-driven customer stockpiling; limited inventory concerns

Commentary:

🔸 CFO Kim Woo-hyun: “Tariffs and protectionist measures are making market forecasting increasingly difficult. We remain cautious yet flexible on Capex.”

🔸 “Despite macro volatility, HBM demand remains strong and predictable due to annual supply agreements.”

🔸 “Direct U.S. exports remain low; shipments for American clients are routed globally.”

Competitive Positioning:

🔸 “SK Hynix’s lead in AI memory and customized HBM solutions underpins our #1 position in DRAM.”

🔸 “We aim to maintain profit-led growth by focusing on high-margin, high-performance memory products.”

$000660

🔹 Operating Profit: ₩8.08T (Est. ₩8.03T) 🟢

🔹 Net Income: ₩8.00T (Est. ₩5.91T) 🟢

🔹 Revenue: ₩19.77T (Est. ₩19.77T) 🟡

Outlook:

🔹 1Q 2025 DRAM B/G: Low-teen% decrease QoQ

🔹 1Q 2025 NAND B/G: High-teen% decrease QoQ

🔹 2025 DRAM Market Outlook: Mid-to-high teen% growth

🔹 2025 NAND Market Outlook: Low-teen% growth

🔹 HBM Revenue: Expected to grow over 100% YoY in 2025

Q4 Segments:

🔹 HBM Revenue: Over 40% of total DRAM revenue in Q4, with HBM3E shipments beginning as planned.

🔹 DRAM ASP: Increased +10% QoQ due to a favorable product mix (HBM and DDR5).

🔹 NAND Revenue: Growth driven by enterprise SSD (eSSD) demand, though legacy products like DDR4 saw price declines.

Full-Year 2024 Financial Performance:

🔹 Operating Profit: ₩23.47T; UP +102% YoY

🔹 Revenue: ₩66.19T; UP +102% YoY

Capital Expenditures and Strategic Investments:

🔹 2025 Capex: Significant increase for new FAB infrastructure and HBM production.

🔹 Dividend Plan: Fixed annual dividend to increase by 25% during 2025-2027.

🔹 1Cnm Technology: Production ramp-up of DDR5 and HBM4 products to maintain competitive edge in high-performance DRAM.

Key Strategic Highlights:

🔸 AI-Driven Growth: Strong demand for HBM products driven by AI servers and GPUs like NVIDIA’s Blackwell expected in 2025-2026.

🔸 General DRAM Shift: Reduced DDR4/LPDDR4 production to single-digit revenue share in 2025, focusing on DDR5 and HBM profitability.

🔸 Customer Alignment: Securing long-term agreements for HBM supply and aligning investments with hyperscale customers’ AI priorities.

🔸 China Concerns: Continued market dominance in advanced DRAM and HBM as Chinese manufacturers face challenges in producing high-performance memory products.