SK Hynix Just Posted a 76% Operating Margin — and Its ADR Broke Its IPO Price the Same Week

SK hynix reported second-quarter revenue of KRW 79.3187 trillion won on Wednesday, operating profit of KRW 60.5426 trillion, and a net result of KRW 93.9226 trillion. That is roughly $58 billion in three months. Operating margin hit 76%, an all-time high for the company and almost certainly the highest quarterly operating margin ever posted by a major memory maker. HBM4 entered mass production, with yields already approaching mature HBM3E levels. The same week, the American Depositary Receipt SK hynix listed on Nasdaq on July 10 — the largest foreign IPO in U.S. history at roughly $26.5 billion — broke its $149 issue price and plunged more than 10% in a single intraday session. The most profitable quarter in chip history got punished by Wall Street anyway. That gap between the operating reality and the tape is the story.

The Numbers

Revenue was up 257% year-on-year and 51% sequentially. Operating profit jumped 557% year-on-year. EBITDA totaled KRW 64.56 trillion at an 81% margin. SK hynix attributed the result to DRAM and NAND price increases plus cost improvement, but the underlying driver is one thing: HBM. AI accelerator demand — from Nvidia, AMD, and the hyperscalers' in-house silicon — has converted high-bandwidth memory from a specialty line into the bottleneck of the entire compute supply chain. SK hynix is the only vendor shipping HBM4 in volume right now. That pricing power is what 76% looks like.

The net profit figure deserves a footnote. At KRW 93.9 trillion against revenue of KRW 79.3 trillion, the implied net margin is 118%. That is not a typo and not an accounting trick in the traditional sense. It reflects deferred tax asset recognition, equity-method gains from listed affiliates, and a favorable won-dollar environment. Strip those out and the operating margin is still the headline story.

What HBM4 Actually Changes

HBM4 is the first generation of high-bandwidth memory designed natively for the post-Blackwell accelerator class. Each stack carries wider I/O, higher per-pin bandwidth, and a base die that integrates more logic than prior generations. SK hynix's decision to begin mass production in Q2 — ahead of Micron and well ahead of Samsung — is what gives Nvidia's next platform a real shipping date. The company says HBM4 yields are approaching mature HBM3E levels, and HBM4E samples have already shipped. If that ramp curve holds, the 76% operating margin in Q2 is not a peak — it is a baseline.

The strategic implication is what the market keeps missing. HBM is now the gating factor for frontier AI buildouts. Every additional rack of Nvidia GB200 or GB300 systems that ships is, first and foremost, an HBM order. SK hynix is the supplier that can say yes fastest. Samsung's HBM3 qualification with Nvidia dragged through most of 2024 and 2025. Micron is shipping HBM3E at scale but is still a generation behind on HBM4. SK hynix's lead is not a quarter or two. It is a product cycle.

The ADR That Broke

On July 10, SK hynix listed 17.79 million ADRs on Nasdaq under the ticker SKHY, raising approximately $26.5 billion in the largest foreign IPO ever executed in the United States. The pricing came at $149 per ADR — a 16% to 51% premium over the Korean-listed common shares. The Wall Street Journal flagged that premium as unsustainable at the time. It was. Within three weeks, the ADR had slipped below the issue price. By Wednesday's session, it was down more than 10% intraday.

The pattern is now familiar. SpaceX's direct listing earlier in 2026 broke issue price too. The thesis behind U.S. listings is that American investors will pay a premium for dollar-denominated access to foreign growth. The reality, twice in a row, has been that arbitrage closes the gap — fast, violently, and usually right after a blowout quarter that should have supported the price. SK hynix posted its best quarter ever and watched its ADR fall 10%. That is not a story about SK hynix. It is a story about how U.S. investors are pricing foreign listings in 2026, full stop.

The Inference

SK hynix is now the most profitable chipmaker in the world on a quarterly basis, and it is the only company that can ship the memory Nvidia needs for its 2026 and 2027 platforms. None of that is priced into the ADR yet. The next twelve months will tell whether the U.S. listing re-rates toward the Korean parent, or whether the Korean parent gets pulled down to meet it. Historically, the parent wins — but historically, 76% margins did not exist.