SK Hynix rides DRAM wave, doubles down on HBM with capex boost

SK Hynix reported second-quarter 2025 revenue of KRW22.23 trillion (US$16.17 billion), up 35% year-over-year, driven by surging demand for AI and high-performance DRAM. The company plans to boost capex to meet growing demand for HBM and AI memory products.

On July 24, SK Hynix reported consolidated revenue of KRW22.23 trillion for the second quarter of 2025, up 35% year-over-year, driven by strong demand in the AI and high-performance computing sectors. Gross profit surged nearly 60% to KRW11.98 trillion, while operating income climbed 68% to KRW9.21 trillion.

SK hynix reported that strong investments by major global technology firms in artificial intelligence have driven a consistent rise in demand for AI memory. Shipments of both DRAM and NAND flash exceeded expectations, contributing to the company's strongest quarterly performance to date.

In the second quarter of 2025, DRAM led the company's performance. DRAM revenue surged 51% year-over-year to KRW16.14 trillion, fueled by strong demand from AI servers and high-performance computing. In contrast, NAND Flash sales fell 25% to KRW3.89 trillion, reflecting soft pricing and sluggish demand.

SK Hynix expects continued momentum in 2H25

SK Hynix attributed its strong second-quarter results to robust demand growth and favorable pricing conditions in the first half of 2025. In its prepared remarks, the company noted that a sharp demand correction in the second half is unlikely, citing stable customer inventory levels and ongoing momentum from new product launches.

For the PC and smartphone markets, SK Hynix expects more widespread adoption of AI features to boost both device demand and memory content per unit. In the server segment, demand remains healthy as major cloud providers continue capex despite macroeconomic uncertainties. The company also anticipates steady growth in general-purpose server demand, supported by hardware refresh cycles and new CPU platforms.

On the NAND side, SK Hynix projects broader adoption of power-efficient SSDs, particularly in high-performance, high-capacity applications, as energy efficiency becomes an increasingly important metric across data center and enterprise markets.

The company is on track to double its HBM sales year-on-year and expects stable performance through the second half. In March 2025, SK Hynix became the first to provide HBM4 samples to customers, and it is now working closely with partners on performance optimization.

SK Hynix plans to expand DRAM sales in line with rising end-market demand. Key products include high-speed DDR5 running above 8,000Mbps, high-density server modules exceeding 128GB, and LPDDR5X for flagship smartphones. LPDDR4X remains targeted at the Chinese market. The company has begun supplying LPDDR-based server modules and is preparing to introduce 24Gb GDDR7 within 2025.

The company is accelerating its NAND strategy with a full-scale rollout of QLC-based high-density enterprise SSDs exceeding 120TB in the second quarter. It continues rapid development to match market improvements, having developed a 321-layer UFS 4.1 in May, and plans to expand its 321-layer product lineup to include both client and enterprise SSDs by year-end.

SK Hynix to boost capex for HBM demand; M15X to start in the fourth quarter of 2025

Song Hyun Jong, president and head of Corporate Center at SK Hynix, stated that the company would carry out part of the planned investments preemptively this year to ensure the smooth provision of major products with visible demand for next year, including HBM. He emphasized that the company was on track to meet its goal as a Full Stack AI Memory Provider, satisfying customers and leading market expansion through the timely launch of products with best-in-class quality and performance required by the AI ecosystem.

SK Hynix plans to increase its capex in 2025 to ensure timely support for growing HBM demand in 2026. The company reaffirmed that its new M15X fab will open as scheduled in the fourth quarter of 2025. The facility is expected to begin producing DRAM, including HBM, starting in 2026.

In parallel, construction of the first fab at its Yongin cluster remains on track for completion in the second quarter of 2027. Management emphasized that proactive investment is necessary this year to prepare sufficient capacity for HBM customers, signaling cape will rise beyond earlier projections to meet long-term strategic goals.

Source: SK Hynix, July 2025

Source: SK Hynix, July 2025

Article edited by Joseph Chen