Update: The post-earnings conference call Q&A has prompted a rapid reversal in SK Hynix's fortunes... shocker!!
SK Hynix claims it continues to see “explosive” demand from customers and remains confident that AI-related demand will stay strong over the medium to long term.
While the timing of individual AI infrastructure projects may vary, the company says it sees no change in the overall demand trajectory.
Can't have the entire edifice of the Korean economy collapsing, can we!!
* * *
Things are not going to be fun in South Korea tonight...
Good news first...
SK Hynix's net income surged a bigger-than-expected 1,242% (though admittedly on one-time investment gains) with the ginat chipmaker bragging that it won multiyear contracts with around 10 customers.
Ok, now the bad news...
SK Hynix’s quarterly profit rose a smaller-than expected 557%.
The key supplier of Nvidia reported operating profit of 60.5 trillion won ($42 billion) in the June quarter, well below analysts’ average projection for 64.2 trillion won.
Revenue came to 79.3 trillion won, significantly below the consensus 83.9 trillion won.
All further raising fears that the hyperbolic nature of the AI-driven boom that has suspended reality from the cyclical chipmakers, may be starting to decelerate...
“When you’re the dominant supplier of the high-bandwidth memory that powers Nvidia’s chips, the AI boom lands directly on your bottom line,” said Josh Gilbert, Etoro’s lead analyst for APAC and the Middle East.
“That means the market is unlikely to focus on the headline numbers alone. The bigger question is whether margins and guidance can justify its recent performance.”
Add to that the recent fears of rising competition from China and it is no surprise that SKHY (the US ADRs) is trading down 16% in the after-hours (before Korean trading has begun)...
Following yesterday's major drop in Kospi, we have three simple words..
Pray for Kospi
— zerohedge (@zerohedge) July 28, 2026
...and as goes SK Hynix, so goes the global AI demand narrative...
