SK Hynix achieved record-high earnings in the second quarter of its fiscal year 2026. During the subsequent earnings call, the company stated that improvements in AI efficiency will expand industry demand, and AI infrastructure investment will remain robust in the long term. While short-term DRAM ASPs have been relatively weak due to product mix shifts, they are expected to improve in the second half of the year as HBM4 shipments ramp up. Currently, the iteration of new HBM products is progressing smoothly. The company is stabilizing the market through long-term agreements and maintaining steady and efficient capacity investments.
AI Investment Has Not Slowed; Efficiency Gains Are Expanding Demand
Addressing two core market concerns—namely, that efficiency gains in large AI models will reduce compute consumption, and that cloud providers are shifting toward data center leasing, which may dampen CSPs' willingness to procure memory—SK Hynix stated in its Q2 earnings call that the core competitiveness of major cloud providers is deeply integrated with their search, advertising, and cloud services. Therefore, compute deployment is a long-term strategic investment. Although individual projects may experience timing gaps due to power or data center construction schedules, overall AI infrastructure investment will remain steady beyond next year.
Regarding concerns over efficiency gains, the company views this as a positive factor. The same infrastructure can support more users and services, thereby expanding the accessibility and adoption of AI. This will continue to drive demand for HBM, server DRAM for Agentic AI, and high-performance, high-capacity NAND Flash.
Short-Term DRAM ASP Affected by Product Mix; Expected to Improve in H2
The average selling price (ASP) of DRAM rose by approximately 30% quarter-on-quarter in Q2, which was below some market expectations. During the earnings call, SK Hynix explained that the delayed shipment of certain high-value-added products to the second half of the year, along with changes in the product mix, impacted the blended ASP.
To align with customer needs and its medium- to long-term strategic goals, the delivery of some high-value-added HBM products was postponed to the second half, temporarily dragging down the overall DRAM ASP. This impact is expected to ease in the second half. With the comprehensive ramp-up of HBM4 shipments and increased shipments of 1c nm conventional DRAM, bit growth in the second half is projected to be higher than in the first half. The combination of shipment scale and product mix optimization will jointly drive up DRAM ASPs and overall performance in the second half.
HBM4 in Mass Production, HBM4E Sampled, HBM5 in Forward-Looking Development
For HBM4, SK Hynix began mass production and shipments to core customers in the second quarter and plans to fully ramp up in the second half. The yield and quality of HBM4 have now reached levels comparable to the mature HBM3, with the primary focus on steadily expanding capacity.
For HBM4E, customer sampling has been completed. Utilizing mature processes with proven mass-production stability, development is progressing smoothly according to the roadmap, targeting mass production in 2027.
For HBM5, the company is developing cooling technologies for future products like HBM5 to accommodate the high-load operational requirements of high-density AI clusters.
Regarding 2027 HBM price negotiations, SK Hynix noted that discussions with core customers are progressing smoothly. HBM pricing is not solely determined by conventional DRAM prices. Instead, pricing will comprehensively consider conventional DRAM prices and market supply-demand dynamics, resource and opportunity costs associated with HBM production, technological complexity, and the value the product creates for customers, rather than simply tracking standard memory price fluctuations.
Five-Year LTAs Lock in Stability; Flexible Pricing Mechanisms to Mitigate Volatility
Currently, SK Hynix has completed LTA negotiations with approximately 10 customers, including core clients, and is continuing discussions with other major industry players.
The company revealed that its LTAs are not merely quantitative procurement contracts but long-term strategic partnerships tied to customers' technology roadmaps. The standard cooperation cycle is about five years, with terms customized based on customer type and product characteristics. The pricing mechanism does not adopt a uniform structure; instead, the company is exploring pricing models with customers that better hedge against short-term market volatility and ensure operational stability for both parties. Additionally, long-term procurement commitments and deposit clauses are included to guarantee contract fulfillment. This helps customers secure stable supplies while providing the company with a basis to optimize its investment and production planning.
No New Investment Plans for Now; Capacity Layout Balances Efficiency and Flexibility
SK Hynix’s core investment and expansion strategy is "timely investment" and "efficient execution." In the medium to long term, it will maximize the utilization of existing production bases and optimally combine them with new infrastructure where necessary to ensure additional manufacturing capacity. When selecting production sites, the company will not differentiate between domestic and overseas locations but will make optimal decisions based on comprehensive factors such as power, water resources, human capital, supply chain, industrial ecosystem, and customer accessibility.
As of now, beyond announced investments, SK Hynix has not made any specific decisions regarding investments in new production infrastructure. The company will continue to leverage Icheon and Yongin as core production hubs for next-generation DRAM and AI memory, while strengthening Cheongju's manufacturing capabilities in NAND and advanced packaging. Moving forward, the company will continue to secure production sites at appropriate junctures to meet customer demand, enhancing investment efficiency by utilizing existing assets while evaluating new investments.
All Rights Reserved © 2026 MemoryMarket.com
