SK Hynix reported record Q2 earnings (557% YoY profit growth) while announcing expansion costs climbing to $27 billion for HBM and memory production capacity.

SK hynix reported second-quarter revenue of 79.32 trillion won and operating profit of 60.54 trillion won, with the latter rising 557% year over year at a record 76% operating margin. On its Seoul earnings call, the company lifted 2026 capital spending guidance to the high 40 trillion won range, citing AI server demand that continues to outpace its production capacity.

Third-quarter DRAM bit shipments are guided up around 10% sequentially, following a quarter in which DRAM average selling prices rose roughly 30%, while NAND prices climbed in the mid-50% range.

SK hynix priced 177.9 million American depositary receipts at $149 each earlier in July, raising $26.51 billion in the largest share sale by a non-U.S. company on record. The SEC filing earmarked proceeds for Korean manufacturing facilities and equipment, including EUV scanners.

The capex guidance funds an accelerated mass production schedule at the M15X fab in Cheongju, the Yongin Phase 1 cleanroom scheduled to open in early 2027, and the previously announced P&T7 advanced packaging plant and M17 NAND base, to be built in phases according to customer demand. Cash and short-term investments reached 88 trillion won at the quarter's end, up 33.6 trillion won in three months, against interest-bearing debt of 18.6 trillion won and a debt-to-equity ratio of 7%.

CEO Kwak Noh-jung called 2027 the worst year of the shortage and put the end of the crisis beyond 2030. Full-year DRAM demand is growing at a mid-20% rate by the company's estimate, against bit shipments guided up around 10% next quarter. None of the capacity being funded will produce wafers before 2027.

Operating profit fell below the 64.1 trillion won that brokerages surveyed by Yonhap Infomax had modeled. Executives attributed the softer blended DRAM average selling price to product mix and high-value shipments deferred to the second half, saying the gap should close as HBM4 and 1c-node conventional DRAM ramp up. HBM4 entered mass production during the quarter, HBM4E samples have shipped, and volume production is targeted for 2027.

Triggered by global selloffs, SK hynix closed down around 10% in Seoul following the announcement, while Samsung Electronics fell 5%, with the KOSPI ending the session 6% lower and below 6,000 for the first time since April 14. The index touched 5,262 at one point, down almost 13%, with its five-session decline reaching 17% and cutting a year-to-date gain that had reached 116% in June down to 34%. Over the past month, SK hynix lost 47% of its value and Samsung 37%. The KOSPI fell 10.84% the previous day and triggered a marketwide circuit breaker after SK hynix's American depositary receipts dropped below the $149 listing price.

Weaker shareholder-return expectations compounded the earnings miss. SK hynix told analysts that additional returns remain under evaluation and would be disclosed within the year. Josh Gilbert, eToro's lead analyst for Asia-Pacific and the Middle East, said that "expectations had simply moved ahead of what even another record quarter could deliver."

CXMT closed its Shanghai debut up 466% following a 57.92 billion yuan fundraise for DRAM wafer lines, while a recent report indicated China was running to around five units of domestic immersion DUV scanners at low-volume production this year. TrendForce forecasts conventional DRAM contract prices rising 13% to 18% in the third quarter, with NAND up 10% to 15%.