SK Hynix posted a second-quarter operating profit of approximately 60.5 trillion won (US$41.6 billion), marking a 557% increase from a year earlier, but falling short of analyst forecasts of 64 trillion won [1, 2, 3, 4, 5, 6]. Revenue grew about 257% year-on-year to roughly 79.3 trillion won, also below estimates of 84 trillion won [5, 6].

The company attributed its record profit growth to sustained demand for high-performance memory chips used in AI data centers and expanding AI infrastructure. A SK Hynix spokesperson said, "Driven by sustained demand growth from expanding AI infrastructure investments, high-performance products for AI servers led price increases, enabling the company to surpass its previous record set in the prior quarter" [3]. SK Hynix is a market leader in high-bandwidth memory (HBM) technology for AI, with contracts exceeding $500 billion, including deals with Nvidia [5, 6, 7].

Despite the strong results, SK Hynix shares have tumbled 38-45% from their June peak in just over a month, wiping out between $470 billion and $570 billion in market value according to sources [7, 8, 9, 10]. The exact figure varies with some sources citing $570 billion [7, 10] and others $470 billion [8, 9]. The stock’s American depositary receipts (ADR) listed in the U.S. fell below their July 9 offering price amid volatility linked to leveraged ETFs [7, 8, 10].

Investor concerns include the overcrowding of AI trades, volatility caused by leverage, rising memory chip costs, and doubts over the sustainability of AI investments by hyperscalers such as Microsoft, Meta, and Amazon [7, 8, 3, 10, 6]. Andy Wong, head of multi-asset at Pictet Asset Management HK Ltd, said, "The debate now is whether memory is taking too much of the pie. The market wants to see if anything can shift the perception that SK Hynix is squeezing too much margin out of the supply chain" [7].

SK Hynix has signed roughly 10 long-term supply contracts with major customers featuring financial terms to boost mid- to long-term demand visibility [3]. However, competitors like Samsung Electronics are closing the gap in HBM technology [7, 11, 10].

Earnings reports from SK Hynix, Samsung Electronics, and Kioxia due in the coming months will be closely watched as tests of the durability of AI-driven memory chip demand [11].