[News] SK hynix Set to Post Record Operating Margin in Q2, as HBM Mix Weighs on ASP Growth and LTAs Gain Focus

SK hynix’s Q2 earnings report, due on July 29, has become a key market event as investors weigh whether the AI-driven semiconductor rally still has room to run. Despite concerns over a potential AI peak, the market broadly expects SK hynix’s high-margin profile to remain intact, with Q2 operating margin forecast to reach a record level.

Korea Investment & Securities, cited by Chosun Biz, expects SK hynix’s operating margin to climb to 74.6% in Q2, while BLOTER, citing FnGuide data, offers an even more bullish estimate of roughly 77%, 5 percentage points above the previous record of 72% set in Q1.

However, both estimates suggest that SK hynix’s operating profit could fall short of the KRW 65 trillion consensus. Korea Investment & Securities, cited by Chosun Biz, projects SK hynix to post KRW 80.9 trillion in revenue and KRW 60.4 trillion in operating profit for Q2, representing increases of 264% and 556%, respectively, from a year earlier.

Meanwhile, Mirae Asset Securities takes a cautious view as well, lowering its SK hynix Q2 operating profit estimate by 12% to KRW 62.3 trillion from KRW 70.7 trillion, according to Financial Post. The revision came after the brokerage cut its DRAM and NAND ASP forecasts by 8 percentage points and 5 percentage points, respectively, the report adds.

HBM Mix Weighs on Near-Term ASP Growth

The uncertainty surrounding SK hynix’s operating profit outlook can be partly attributed to its changing product mix, as Chosun Biz highlights that the company’s higher HBM sales exposure compared with peers has weighed on near-term ASP growth.

However, the report expects the gap to narrow from the third quarter as HBM4 ramps up into full-scale production and sales, bringing ASP growth closer to the market pace. According to Korea Investment & Securities’ estimation, SK hynix’s DRAM and NAND ASPs increased around 30% and 50%, respectively, quarter over quarter in Q2.

LTA Emerges as a Key Earnings Factor

Meanwhile, Chosun Biz highlights that the expansion of long-term agreements (LTAs) is also reshaping the outlook for SK hynix’s earnings. Korea Investment & Securities, cited by the report, has lowered its operating profit forecasts by 9% for 2026 and 11% for 2027, but clarified that the revisions were not a reflection of weaker earnings expectations. Rather, the brokerage said the changes stem from more realistic pricing assumptions under an evolving LTA-based memory market.

The report notes that looking ahead, the key focus is the sustainability of revenue growth. The growing adoption of LTAs is expected to reduce the earnings volatility that has long been a structural weakness of the memory industry, shifting investor attention from short-term ASP trends toward the durability of profitability, the report adds.

This view is also supported by TrendForce, which notes that long-term supply agreements are increasingly influencing memory pricing dynamics. As some CSPs have already secured LTA-based supply, server DRAM price increases from Q3 2026 are expected to be driven mainly by customers without LTAs, as well as additional supply sold outside existing contracts. TrendForce forecasts server DRAM contract prices will rise 13–18% QoQ in Q3 2026.

Notably, Financial Post, citing Mirae Asset Securities, notes that LTAs account for roughly half of SK hynix’s total revenue, helping support a more stable pricing environment as HBM becomes the key growth driver.

Read more

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(Photo credit: SK hynix)