Monthly, Quarterly, by Mutual AgreementThin moat
SK hynix (SKHY) — moat facet
Memory is not sold under contract so much as renegotiated forever, which converts pricing power into cash faster than any other arrangement available.
The mechanics of how memory is sold explain more about this company than any statement about technology.
SK hynix's report describes it in one sentence: supply volumes and prices are determined on a monthly and quarterly basis by mutual agreement with major customers, and there is no order backlog based on long-term supply contracts1.
Two consequences follow. The first is that pricing power, when it exists, is immediately convertible. A supplier under contract watches a shortage happen to somebody else's margin; SK hynix participates in it directly, which is why revenue rose 50.9% in a single quarter2 without a single new customer.
The second is that the relationship is renegotiated perpetually. There is no point at which either side has settled anything. What holds a customer is not a document — it is qualification, yield, and the fact that switching memory suppliers inside a product generation is impractical.
That last point is what makes the arrangement survivable rather than reckless. Repricing power without switching costs would simply mean the customer leaves; repricing power on top of a part that has been qualified into a specific accelerator is something else.
The measure is gross margin, which moved from 60.4% for 2025 to 79.3% in the first quarter of 20263. In a business repriced quarterly, gross margin is not a summary of performance — it is a live reading of the negotiation.
This is the oldest feature of the memory business and the least likely to change. Both sides prefer it, for opposite reasons, in different years.
₩52,576.3 billion to ₩79,318.7 billion between the first and second quarters of 2026, with no new customer required. That is what quarterly repricing does when the price of memory moves — and it is the same mechanism that produced a gross loss in 2023.
Source: SK hynix Q2 2026 preliminary results (SEC Form 6-K) ↗- ReportedVolumes and prices are determined on a monthly and quarterly basis by mutual agreement, with no order backlog based on long-term supply contracts.SK hynix Inc., semi-annual business report for the six months to 30 June 2026 (SEC Form 6-K, 18 August 2026) — 'The Company determines supply volumes and prices on a monthly and quarterly basis by mutual agreement with major customers, and there is no order backlog based on long term supply contracts.' Total equity W 262,693,228 million at 30 June 2026 against W 120,666,751 million at 31 December 2025; cash and cash equivalents, short-term financial instruments and short-term investment assets W 87,957,923 million against W 34,942,253 million; total borrowings W 18,586,634 million against W 22,247,905 million; debt-to-equity 32.80%, net borrowing ratio not disclosed because it is negative. For the six months to 30 June 2026, revenues of W 17,608,702 million (13.35%) and W 17,187,421 million (13.03%) were derived from external Customers A and B respectively; for the six months to 30 June 2025, W 10,890,639 million (27.31%) came from Customer A. IDC market share: DRAM 29.9% in 2023, 33.4% in 2024, 34.8% in 2025 and 29.1% in Q1 2026; NAND 19.6%, 21.4%, 20.9% and 18.5%. Gartner's world DRAM market: US$78.7bn in 2022 (-15.4%), US$49.9bn in 2023 (-36.5%), US$91.6bn in 2024 (+82.7%) and US$146.9bn in 2025 (+60.0%). Announced investments include approximately W 15 trillion for M15X in Cheongju, approximately W 19 trillion for the P&T7 advanced packaging plant and W 21,608.1 billion for Yongin, against long-term plans of roughly W 600 trillion for the Yongin cluster and W 100 trillion for Cheongju. The company developed the world's first 321-layer QLC NAND. China's State Administration for Market Regulation cleared the Intel NAND acquisition conditionally, obliging the group to maintain a reasonable pricing policy, increase production and support the entry of third-party competitors into the Chinese eSSD market for five years from December 2021. — six months to 30 June 2026 · publ. 2026-08-18 · source ↗
- ReportedRevenue rose 50.9% in a single quarter, from ₩52,576.3bn to ₩79,318.7bn.SK hynix Inc., preliminary results of operations for the second quarter of 2026 (SEC Form 6-K, 29 July 2026) — revenue W 79,318,746 million, up 50.9% on Q1 2026's W 52,576,287 million and 256.8% on Q2 2025's W 22,231,952 million; operating profit W 60,542,608 million, up 61.0% sequentially and 557.2% year on year, an operating margin of about 76%; profit before income tax W 122,708,355 million; profit for the period W 93,922,593 million. First-half 2026 revenue W 131,895,033 million, operating profit W 98,152,891 million and profit W 134,268,502 million. Prepared on a consolidated basis under K-IFRS and unaudited. — Q2 2026 (quarter ended 30 June 2026) · publ. 2026-07-29 · source ↗
- Moat Explorer calcGross margin moved from 60.4% for 2025 to 79.3% in the first quarter of 2026.SK hynix Inc., Form 424B4 prospectus — consolidated income statements and management's discussion (SEC, CIK 2120882). FY2025: revenue W 97,147bn, cost of sales W 38,456bn, gross profit W 58,691bn, selling and administrative expenses W 5,019bn, research and development W 6,466bn, profit for the year W 42,948bn. FY2024: revenue W 66,193bn, gross profit W 31,828bn, R&D W 4,436bn, profit W 19,797bn. FY2023: revenue W 32,766bn, cost of sales W 33,299bn, a gross loss of W 533bn, an operating loss of W 7,730bn and a loss for the year of W 9,138bn, following a fall in memory prices from the third quarter of 2022. Q1 2026: revenue W 52,576bn, cost of sales W 10,897bn, gross profit W 41,679bn, R&D W 2,451bn, profit W 40,346bn. — FY2023-FY2025 and Q1 2026 · publ. 2026-07-10 · source ↗