The big one is coming! Trillion chip giant is about to be announced! Profit surged nearly 6 times. What is the impact?
The chip giant’s financial report is coming soon! An industry analysis report released by Korean media on Sunday (July 26) showed that SK Hynix’s operating profit in the second quarter of this year is expected to hit a record high of 64.1 trillion won (equivalent to approximately RMB 294.8 billion), a year-on-year increase of 596% and an increase of more than 70% from the first quarter. According to arrangements, memory chip giant SK Hynix will disclose its second-quarter financial report on July 29, and Samsung Electronics will announce its complete second-quarter financial report on July 30. The above financial reports may affect the trend of chip stocks in the next stage.
The chip giant’s financial report is coming soon! An industry analysis report released by Korean media on Sunday (July 26) showed that SK Hynix’s operating profit in the second quarter of this year is expected to hit a record high of 64.1 trillion won (equivalent to approximately RMB 294.8 billion), a year-on-year increase of 596% and an increase of more than 70% from the first quarter. According to arrangements, memory chip giant SK Hynix will disclose its second-quarter financial report on July 29, and Samsung Electronics will announce its complete second-quarter financial report on July 30. The above financial reports may affect the trend of chip stocks in the next stage. SK hynix’s operating profit may reach new high According to the latest report released by Korean media, in the artificial intelligence-driven semiconductor super cycle, SK Hynix, relying on its leading position in the HBM (high bandwidth memory) market, is expected to achieve operating profits of 64.1 trillion won (approximately US$43.7 billion) in the second quarter, a record high. The consensus estimate compiled by Yonhap News Agency Infomax's forecast data from 14 local Korean brokerages shows that SK Hynix's sales in the April to June quarter this year are expected to be 84.1 trillion won, and its operating profit will be 64.1 trillion won. This figure will exceed the company's 2025 full-year operating profit record of 47.2 trillion won. SK Hynix's second-quarter operating profit margin is expected to reach approximately 75% to 77%, up from 75% in the first quarter. The above expectations are generally consistent with the second-quarter performance guidance released by Samsung Electronics earlier this month. The latter expects operating profit for the quarter to reach 89.4 trillion won, also setting a quarterly record. If the second-quarter results announced by SK Hynix on Wednesday (July 29) are in line with expectations, the combined quarterly operating profits of the two Korean memory chip giants will exceed 150 trillion won. Analysts attributed the strong quarterly results to rising memory chip prices and strong demand for HBM and solid-state drives (SSDs) in AI data centers. Kim Dong-won, a researcher at KB Securities, said: "In the second quarter, sales revenue from global technology companies and AI data center operators is expected to account for 70% of SK Hynix's total revenue." It is worth noting that the South Korean Presidential Office Cheong Wa Dae stated on the 25th local time that taking the San Francisco Artificial Intelligence (AI) Summit as an opportunity, Korean companies and global technology giants have reached a total scale of US$950 billion in semiconductor cooperation. Among them, SK Group will promote long-term supply cooperation of high-end memory chips with a total scale of US$750 billion and a five-year period with Nvidia and other large global technology companies. Samsung Electronics and Broadcom signed a memorandum of understanding. The two parties will cooperate in the supply of high-end memory chips worth US$200 billion and AI chip wafer foundry production in the next five years. In addition, Korean companies and large global technology companies have decided to promote investment and cooperation in AI data centers, planning to build a computing infrastructure with a total scale of approximately 5 gigawatts (GW) and deploy approximately 2 million graphics processors (GPUs). In the field of Physical AI, Hyundai Motor Group will jointly build a Robot Reference Platform with NVIDIA to provide standardized support for universities and start-ups to develop various robots. At the same time, it also announced a self-driving car OEM plan with Waymo. Samsung SDS signed a strategic partnership agreement with Anthropic. The two parties will jointly explore new AI markets and jointly train AI engineers. Kim Yong-beom, director of the Policy Office of the South Korean Presidential Office, also said that many heads of international technology companies hope that the Korean government will continue to promote the current AI policy, and also called for speeding up the approval of AI data center projects. South Korean President Lee Jae-myung responded by saying that he would attach great importance to the speed of project advancement. Jensen Huang denies chip boom is about to collapse After chip stocks soared on the back of the AI craze, they have suffered a sharp sell-off recently as concerns over the sustainability of huge capital expenditures have risen again. The sell-off occurred despite strong earnings reports and guidance from leading chipmakers and continued supply shortages due to strong demand.
The semiconductor industry is known for its cyclical booms and busts, but Nvidia CEO Jensen Huang doesn't think a recession is imminent. Recently, in an interview with Axios co-founder Mike Allen, Huang was asked whether the industry was about to face a collapse. He replied: "No, not in the short term." Allen immediately asked: "So this time is different?" Huang Renxun said: "This time is different because it is not driven by seasonal demand, but by industry, which means that the basic technology of computers is changing." He added that the world needs a whole new set of infrastructure, namely AI, and this requires chip support. He estimates the industry must expand five to ten times in the next decade. Of course, these words come from the CEO of a top AI chip supplier, and his optimistic attitude is not surprising. But what’s noteworthy is his endorsement of the idea that “this time is different.” At the same time, hyperscale companies are investing hundreds of billions of dollars in capital expenditures each year to build AI infrastructure as quickly as possible. Although they previously relied on their own huge cash flow to support these capital expenditures, this is no longer enough - even Alphabet has experienced negative cash flow. As a result, tech giants are issuing more bonds. Asked if he was worried about customers issuing debt to buy his chips, Huang said he was not concerned and noted that computing is changing. He explained: "Computing in the future will be completely different from the past, and we will need more computers." Huang also pointed out that AI has become profitable for companies such as Anthropic, especially when customers discover the practicality of intelligent agents. AI is currently at an inflection point, and as it brings profits and increases productivity, more of this technology must be built. He acknowledged that the bubble will burst one day, but not anytime soon because AI construction is still in its early stages. Huang believes that the limited supply of resources such as chips, land, electricity and construction workers has actually delayed faster growth, which is actually beneficial because it pushes back the timeline for supply to eventually exceed demand. He said: "We are basically restricted in every direction and every link. This restriction is a good thing. It slows down the rhythm of the entire system and gives us enough time to build these infrastructures."
The semiconductor industry is known for its cyclical booms and busts, but Nvidia CEO Jensen Huang doesn't think a recession is imminent. Recently, in an interview with Axios co-founder Mike Allen, Huang was asked whether the industry was about to face a collapse. He replied: "No, not in the short term." Allen immediately asked: "So this time is different?" Huang Renxun said: "This time is different because it is not driven by seasonal demand, but by industry, which means that the basic technology of computers is changing." He added that the world needs a whole new set of infrastructure, namely AI, and this requires chip support. He estimates the industry must expand five to ten times in the next decade. Of course, these words come from the CEO of a top AI chip supplier, and his optimistic attitude is not surprising. But what’s noteworthy is his endorsement of the idea that “this time is different.” At the same time, hyperscale companies are investing hundreds of billions of dollars in capital expenditures each year to build AI infrastructure as quickly as possible. Although they previously relied on their own huge cash flow to support these capital expenditures, this is no longer enough - even Alphabet has experienced negative cash flow. As a result, tech giants are issuing more bonds. Asked if he was worried about customers issuing debt to buy his chips, Huang said he was not concerned and noted that computing is changing. He explained: "Computing in the future will be completely different from the past, and we will need more computers." Huang also pointed out that AI has become profitable for companies such as Anthropic, especially when customers discover the practicality of intelligent agents. AI is currently at an inflection point, and as it brings profits and increases productivity, more of this technology must be built. He acknowledged that the bubble will burst one day, but not anytime soon because AI construction is still in its early stages. Huang believes that the limited supply of resources such as chips, land, electricity and construction workers has actually delayed faster growth, which is actually beneficial because it pushes back the timeline for supply to eventually exceed demand. He said: "We are basically restricted in every direction and every link. This restriction is a good thing. It slows down the rhythm of the entire system and gives us enough time to build these infrastructures."