SK Hynix Posts 72% Profit Margin, Yet Stock Craters 10% — A Tale of Two Realities

SK Hynix ended one of the most contradictory weeks in its recent history. The memory-chip giant secured a landmark endorsement from Nvidia for its next-generation HBM4 technology, announced a massive capacity expansion, and revealed plans for a $14 billion U.S. initial public offering. Yet by Friday’s close, the stock had plunged 9.92% to 2,070,000 won, wiping out gains that had pushed it to an all-time high of 2,407,000 won just days earlier.

The trigger came from across the Pacific. Broadcom issued an AI revenue forecast that fell short of market expectations, sparking a global selloff in semiconductor equities. Compounding the damage, a surprisingly robust U.S. jobs report for May — 172,000 new positions against a forecast of 85,000 — sent Treasury yields climbing and dashed lingering hopes for near-term rate cuts. The PHLX Semiconductor Index cratered 10.3%, dragging SK Hynix down with it. On a weekly basis, the stock lost roughly 11% despite still sporting a year-to-date gain of 205.76%.

The selloff looks all the more jarring given the company’s operational strength. In the first quarter, SK Hynix controlled 58% of the global high-bandwidth memory market — chips that are indispensable for AI accelerators. That dominance is driving an extraordinary margin story: operating profit margin hit an unprecedented 72%, and quarterly revenue crossed the 50 trillion won threshold for the first time. Rising contract prices for DRAM and NAND flash continue to fuel what executives describe as a genuine supercycle.

Should investors sell immediately? Or is it worth buying SK Hynix?

Those fundamentals are underpinning one of the industry’s most ambitious buildout plans. SK Group chairman Chey Tae-won announced at Computex that the company intends to double its DRAM wafer capacity from 550,000 to roughly one million wafers per month by the early 2030s. The Yongin semiconductor cluster alone will house six new clean rooms capable of producing 360,000 wafers a month by 2030, while the Cheongju M15X facility adds another 80,000 wafers per month next year. To fund this $67 billion capital expenditure program through 2028, SK Hynix has filed a confidential registration with the SEC for an ADR offering that could raise up to $14 billion. Goldman Sachs, already bullish, lifted its 2028 earnings forecast by 24% on the back of the AI-driven DRAM supercycle.

Technically, the rout has pulled the stock out of overbought territory. The relative strength index now stands at 59.8, and while the share price remains 42% above its 50-day moving average — around 1.46 million won — the momentum has clearly cooled. Broad swaths of the market are rotating into defensive sectors, leaving SK Hynix to digest the Broadcom shock. Whether the chipmaker can reclaim its lost ground next week will depend heavily on whether the broader semiconductor trade can shake off the fright. For now, the company’s story remains one of record numbers clashing brutally with market sentiment.

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