This week, SK hynix (SKHY), Samsung Electronics (SSNLF), and Kioxia are set to release their second-quarter earnings, with expectations of robust growth. However, all three companies have recently faced a wave of stock sell-offs. The market will closely watch their earnings calls for third-quarter outlooks, memory pricing guidance, and long-term agreement details to assess the stage of the memory cycle.
July 28 (Caixin) -- As artificial intelligence continues to fuel memory demand, the profitability of the world's top memory makers is drawing widespread industry attention. This week, the three major memory manufacturers from Japan and South Korea—SK hynix, Samsung Electronics (SMSD.UK), and Japan's Kioxia—are set to release their latest quarterly earnings reports.
For global investors, these reports will not only reflect the profitability of these three companies but also provide key insights into the future of global AI infrastructure investments and the supply-demand dynamics of memory and storage.
More importantly, global memory stocks have recently experienced a significant sell-off. Notably, shares of SK hynix and Kioxia have nearly halved from their previous highs. Against this backdrop, whether the earnings of these three memory giants can turn the tide and restore investor confidence will be particularly noteworthy.
Can SK hynix’s Earnings Revive Its Stock?
Leading the pack this week is SK hynix (SK hynix / SK hynix ). As a dominant player in the HBM market, the company plans to release its second-quarter earnings on Wednesday (July 29) local time in the morning.
With DRAM and NAND flash prices collectively rising, South Korean brokerages estimate SK hynix’s second-quarter revenue at 84.1 trillion won, with operating profit reaching 64.1 trillion won. For comparison, operating profit in the previous quarter was 37.6 trillion won.
This implies that SK hynix’s operating profit for the first half of the year could surpass 100 trillion won, exceeding its total profit for all of last year by 17 trillion won—a testament to the explosive power of the memory supercycle.
SK hynix’s second-quarter operating margin is expected to reach 75% to 77%, up from an already high 72% in the previous quarter.
According to industry analysts, as long-term agreements (LTAs) account for a growing share of shipments, sales to major tech companies and AI data center operators are expected to make up 70% of SK hynix’s total revenue. This shift in sales structure suggests a significant reduction in the risk of memory cycle volatility, improving the predictability and stability of earnings.
Despite the remarkably strong fundamentals, SK hynix’s stock price has continued to fall sharply. As of Tuesday’s press time, its shares had dropped about 45% from their previous highs, while its ADR listed in the U.S. has fallen below the issue price.
Against this backdrop, investors are most focused on whether SK hynix can steadily ramp up capacity expansion in the second half of the year while maintaining ultra-high growth rates and operating margins. Additionally, whether other large tech companies can sustain their current pace of investment in AI data centers will be a key factor in determining SK hynix’s path forward.
Can Samsung (SMSN.UK) Regain HBM Leadership?
Samsung Electronics plans to release its full second-quarter earnings on Thursday (July 30). According to the company’s preliminary earnings report, second-quarter revenue reached 171 trillion won, while operating profit surged approximately 18-fold year-over-year to an all-time high.
Market expectations compiled by LSEG suggest second-quarter operating profit of 86 trillion won, with some brokerages forecasting as high as 90 trillion won. This would imply an operating margin of up to 51%.
If achieved, Samsung would surpass Nvidia (NVDA)’s performance in the first quarter of fiscal 2026, becoming the global tech company with the highest single-quarter profit. In fact, reports have recently emerged that Samsung’s semiconductor business head, Kim Yong-kwan, stated in an internal meeting that the company’s 2026 profit would exceed the cumulative earnings of its semiconductor business over the past 40 years.
Compared to SK hynix, Samsung faces a different set of questions from the market.
First, the timeline for passing HBM4 certification tests, plans to start mass production with major customers, and whether yield rates for 1b and 1c nanometer processes can stabilize are all critical to whether it can regain its leading position in the HBM market.
Second, the improvement in its non-memory businesses, including foundry and system LSI, is another issue to be addressed during the earnings call.
Finally, whether Samsung’s integrated structure—holding both memory and foundry operations—can provide it with greater cost advantages in the HBM4 phase is another key focus.
Kioxia’s Earnings Outlook and NAND Market Trends
Japanese NAND flash memory maker Kioxia plans to release its second-quarter earnings on Friday (July 31).
In the first quarter (January to March) of this year, Kioxia recorded quarterly revenue of 1 trillion yen, with operating profit of 596.8 billion yen (approximately 25.5 billion yuan). Operating profit was more than four times that of the previous quarter.
At the time, Kioxia had already guided that second-quarter revenue could reach 1.75 trillion yen, with operating profit of 1.298 trillion yen (about 55.6 billion yuan), doubling from the first quarter.
Following the first-quarter earnings release, Wall Street investment banks collectively raised their target prices, sending Kioxia’s stock price soaring and its market capitalization climbing, even briefly making it the most valuable company in Japan. However, since June, the stock has fallen nearly 60% from its highs. On Tuesday alone, it plunged 18%, marking its largest single-day drop since November of last year.
Over the long term, TrendForce expects NAND demand to remain strong until 2027. However, as suppliers continue process migrations, bit output grows steadily, and consumer electronics demand remains weak, the NAND market’s supply-demand balance will gradually normalize. Current supply tightness is expected to ease by the second half of 2027.
Market Focus Goes Beyond the Numbers
Despite a positive earnings outlook, the stock prices of all three companies have clearly faced selling pressure recently. This indicates that investors remain concerned about potential cuts in AI infrastructure spending by major tech companies, which could impact future demand for AI chips and memory.
As a result, overseas investment banks and market research firms will pay closer attention to the conference calls following the earnings releases. Based on management’s explanations of pricing and contract structures in the second half of the year, the market will carefully assess which phase of the memory cycle the market is currently in.
In other words, what the market most hopes to confirm from these conference calls is not the scale of the companies’ earnings, but whether memory makers can maintain high profitability in the second half of the year.
On Wall Street, opinions on the memory cycle are already diverging. For instance, some overseas investment banks and expert institutions, including Morgan Stanley (MS) and TrendForce, have noted that the price increase for mainstream DRAM contract prices has slowed compared to the previous quarter, suggesting that the momentum of memory price increases may be near its peak.
In contrast, the opposing camp cites long-term supply agreements (LTAs). Institutions such as Goldman Sachs (GS) and Citigroup have pointed out that as the proportion of 3- to 5-year contracts between memory giants and large tech customers increases, the volatility of memory product unit prices has decreased compared to previous cycles. They argue that this shift in sales structure means that even if spot prices fluctuate, the final earnings of these companies will not see the same magnitude of change.
Ultimately, the debate over when the memory cycle will peak will hinge on the third-quarter earnings guidance, DRAM and NAND average selling price (ASP) guidance, and clues about long-term agreements disclosed by each company during their earnings calls.
Editor/joryn
