Release Date: April 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SK Hynix Inc (FRA:HY9H, Financial) recorded KRW17.6 trillion in revenue for Q1 2025, marking the second highest quarterly revenue in its history.
- The company achieved a 42% year-on-year increase in revenue, driven by strong sales of high value-added products like HBM3E and DDR5.
- Operating profit for Q1 was KRW7.44 trillion, with an improved operating margin of 42%, demonstrating resilience during market corrections.
- SK Hynix Inc (FRA:HY9H) successfully completed the second closing of the Solidigm acquisition, enhancing its strategic position.
- The company anticipates a low-teen percent sequential increase in DRAM shipments and over 20% growth in NAND shipments in Q2 2025, indicating strong future demand.
Negative Points
- Despite strong performance, SK Hynix Inc (FRA:HY9H) faced an 11% sequential decrease in revenue due to expected seasonal demand weakness.
- NAND shipments declined by high-teens percent compared to the previous quarter, with ASP dropping about 20%, reflecting weaker demand recovery.
- The company faces heightened global uncertainties, such as tariff policies, which increase volatility in demand projections for the second half of the year.
- Interest-bearing debt rose by KRW0.6 trillion to KRW23.3 trillion, and net debt increased by KRW5.5 trillion to KRW9 trillion, impacting financial leverage.
- Tariff-related uncertainties and potential export restrictions pose challenges to SK Hynix Inc (FRA:HY9H)'s supply chain and market demand.
Q & A Highlights
Q: How do you expect memory demand to change this year due to the US tariff policy?
A: While there is uncertainty surrounding tariff policies, global customers are maintaining their planned memory demand. Some are even requesting short-term supply pull-ins. For IT consumer goods, tariffs are temporarily on hold, and new AI product launches are anticipated to stimulate demand. The impact on AI servers is expected to be limited.
Q: Do you anticipate any changes in this year's HBM demand and supply plans due to export restrictions to China?
A: Despite uncertainties, our sales plan for major customers remains unchanged. We are supplying a full lineup of HBM products and plan to more than double our HBM revenue year on year. The transition to HBM3E 12Hi is progressing as planned.
Q: What is driving the increased demand for high-capacity server DRAMs, and what is your outlook?
A: The demand surge is driven by AI model development, particularly due to DeepSeek's impact, which lowers AI development costs. We anticipate continued growth in demand for high-capacity DRAMs for AI workloads, as AI models require more memory for precise results.
Q: How significant is the impact of tariffs on SK hynix's sales to the US, and what is your strategy?
A: Approximately 60% of our revenue comes from US customers, but direct exports to the US are not as high. The impact of tariffs is difficult to assess without detailed criteria. We plan to collaborate with customers to ensure stable supply when tariffs become effective.
Q: Will NAND price recovery and demand growth continue?
A: While demand in the NAND market was weak in Q1, preemptive purchasing and production cutbacks led to a price increase. The price recovery trend is likely to continue in the short term, with mid- to long-term growth expected in high-capacity enterprise SSDs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
