SK Hynix CEO sees no significant signals of memory downturn, predicts historic supply shortage

SK Hynix CEO Kwak Noh-jung has a message for anyone bracing for a memory chip downturn: you’re looking at the wrong data. Speaking during the company’s Nasdaq debut on July 10, the chief executive said he sees no meaningful indicators of a slowdown in the memory semiconductor market, and went a step further by predicting that the supply crunch will only get worse from here.

Kwak projected that 2027 could become “the worst year in the industry’s history from the supply perspective,” forecasting a substantial shortage that could persist well beyond 2030. The culprit, predictably, is artificial intelligence. Demand from AI workloads has been swallowing memory capacity faster than chipmakers can build it.

A quarter that speaks for itself

The numbers behind Kwak’s confidence are difficult to argue with. SK Hynix reported second-quarter 2026 revenue of 79.32 trillion won, a 257% increase year-over-year. That alone would be eye-catching, but the profit line is where things get genuinely staggering.

Operating profit hit 60.54 trillion won, up 557% compared to the same period a year ago. That translates to a roughly 76% operating margin.

The company expects mid-20% growth in DRAM demand for 2026, with NAND demand growing at a high-10% clip. Customer demand, according to Kwak, continues to significantly outpace production capacity.

Long-term deals and strategic positioning

SK Hynix has taken an unusual approach to managing through what it sees as a prolonged supply deficit. The company has secured long-term supply agreements with approximately ten major customers, deals that include deposits and firm commitments. This is a departure from the traditional memory market, where spot pricing and short-term contracts have historically dominated.

The company’s dominance in high-bandwidth memory, or HBM, reinforces this position. SK Hynix holds over 50% of the HBM market, the specialized memory chips that sit inside the AI accelerators powering data centers. HBM has become the bottleneck component in AI infrastructure, and SK Hynix is the bottleneck’s bottleneck.

Wall Street isn’t entirely convinced

Despite the blockbuster financials and bullish outlook, SK Hynix shares dropped over 15% shortly after the Nasdaq listing. The sell-off was attributed to profit-taking and broader concerns that the memory cycle might be approaching its peak.

SK Hynix competes primarily with Samsung and Micron in the broader memory market, but its HBM lead has given it a distinct edge in capturing the highest-margin segment of the business. Samsung has been working to close the gap in HBM, while Micron has made its own strides, but SK Hynix’s first-mover advantage and manufacturing yield leadership have proven durable so far.

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