Relying solely on stock prices to gauge the semiconductor cycle is insufficient; SK Hynix's earnings report serves as a better barometer.

First, standardize the metrics/scope; otherwise, the table may be misleading

This article only selects three companies: SK hynix، Micron، TSMC.

The reason is simple:

SK hynix: The most direct beneficiary of AI memory this round, and also the data object that needs special focus in this article.
Micron: The purest storage beta among US stocks, useful for comparison with SK Hynix.
TSMC: It is not a memory company, but precisely because of that, it is suitable for use as a control group.

To clarify, there are two approaches/perspectives to explain first:

SK hynix, TSMC are primarily based on calendar years.
Micron is based on fiscal years, with FY2025 as of August 28, 2025.

Therefore, these tables are better suited for analyzing period-over-period changes within a single company, rather than being used to perform forced cross-sectional valuations across different companies.

With two downcycles and a bounce/rebound, memory’s reported earnings resilience is striking

After reading this table, the conclusion on the first layer is actually already out:

Semiconductors are not a cycle; at least, memory and logic foundry work are not.

In 2019, the global semiconductor industry was already in a downturn, but TSMC’s revenue still managed to grow against the trend, and its profit margins did not collapse. Conversely, when SK hynix and Micron encountered a storage price cycle reversal, their operating profits would decline before (or more steeply than) their revenues, and the magnitude of this decline is much greater.

This is also why I kept emphasizing in the previous article that US memory and Korean semiconductors cannot be viewed merely as “ordinary semiconductor stocks.” They are more aggressive during upcycles, but they are also harsher during pullbacks.

What really needs to be addressed is how Hynix’s “counter-cyclical” nature actually works.

If you only look at the results, SK Hynix’s financial reports for 2024 and 2025 truly seem like they are “printing money.”

Year	Revenue	Operating Profit	Operating Profit Margin
2023	32.766 trillion KRW	-7.73 trillion KRW	-23.6%
2024	66.193 trillion KRW	23.4673 trillion KRW	35.5%
2025	97.1467 trillion KRW	47.2063 trillion KRW	48.6%

From 2023 to 2025, this is not a normal recovery; it is a turnaround from deep losses to an operating profit margin approaching 50%.

But if “counter-cyclical expansion” is phrased too roughly, it will lose the key point.

A more accurate way to say it is:

\[ \text{Hynix's Counter-Cycle} \neq \text{Massive Expansion Across All Lines} \]\[ \text{SK Hynix's inverse cycle} = \text{Total investment contraction} + \text{HBM/DDR5/LPDDR5 momentum} \]

In other words, instead of heavily supporting all product lines equally in 2023, they prioritized reserving funds for the few lines expected to be most profitable in the next cycle during the worst times.

The difference is very big. (Alternatively: The difference is huge./There is a significant difference.)

The statements made in 2023 basically revealed Hynix’s strategy.

I’ll organize the official narrative chronologically; that way, it will be much clearer.

Therefore, if you remember the incident of “Hynix’s counter-cyclical capacity expansion,” that direction of memory is correct, but a qualifier must be added: it was selective counter-cyclical expansion, not comprehensive and risky overexpansion.

This is also why I feel it is the most accurate indicator.

Because what truly determines if this cycle of memory can be extended is not whether “everyone expanded production,” but rather who managed to secure critical market positions for HBM, DDR5, advanced packaging, and high-value server storage during the downturn.

Comparing it alongside Micron and TSMC makes SK Hynix’s characteristics even more obvious

Micron has actually done similar things before.

In FY 2023, its revenue dropped from $307.58 billion to $155.40 billion, and operating profit fell from $97.02 billion to -$57.45 billion; however, by FY 2024, revenue recovered to $251.11 billion, and operating profit turned positive at $13.04 billion. In FY 2025, it surged further to $373.78 billion in revenue and $97.70 billion in operating profit, with annual capital expenditures also rising from $81.2 billion in

What does this mean?

Micron is also preparing for the next phase of AI memory demand, and capital expenditures have clearly begun to turn upwards again.

However, Hynix’s characteristic remains more pronounced. This is because even when it was at the deepest trough in 2023, it continuously included HBM and DDR5 in its investment priorities multiple times. While Micron seems to be increasing investments after confirming a recovery, following demand trends; Hynix appears to have preemptively captured the next major growth trajectory even during the most challenging reporting period.

Looking at TSMC again, it feels completely different.

In 2019, the global semiconductor industry was already slowing down, yet TSMC raised its capital expenditure to $14.9 billion in 2019, citing stronger demand for 7nm. By 2023, even though the industry was digesting inventory, its revenue only declined by 4.5%, and operating profit decreased by only 17.8%. In 2024, it quickly rose back to NT$2.8943 trillion in revenue and NT$1.3221 trillion in operating profit.

This precisely illustrates a counter-intuitive but very important fact:

Under the term “semiconductor giants” lie two completely different financial structures.

The leader in memory is more like a high-leverage cyclical asset: when prices rise smoothly, profits explode; but when prices reverse, profits decline sharply.
The leader in logic / foundry is more like an industry platform with a moat. While it is also cyclical, unlike memory, it is not as easily overthrown by ASP.

So, if you want to focus on “companies best positioned to amplify cyclical upturns” this round, Hynix and Micron are certainly more sensitive than TSMC.

But if you want to monitor “when risk shifts from selective capacity expansion to industry-wide capacity expansion,” then TSMC’s massive capital expenditures, advanced packaging, and customer structure are instead another type of forward indicator.

These financial figures perfectly complete the analysis from the previous section

In my previous article, I said that this semiconductor cycle is unlikely to end by 2026. (or: …is highly unlikely to collapse before 2026.)

After supplementing the financial data in this document/report, the logic becomes much more coherent/complete.

First, the trough in 2023 was too deep.

Both SK hynix and Micron have experienced significant dips in their profitability/profit statements. The deeper this trough, once prices and product structures rebound, profit recovery is more likely to appear “jump-like” rather than “linear.”

Secondly, companies like SK Hynix have proven that establishing a strong market cycle was not something they began preparing in 2024, but rather positioning themselves since the toughest period of 2023.

This means that the high profits projected for 2026 are not merely residual from inventory rebuilding; rather, they represent the realization phase of the preceding round of selective counter-cyclical investments. As long as this realization period continues, the overall cycle is unlikely to end quickly.

Third, what is truly dangerous now is not Hynix securing the HBM line in 2023, but whether more and more companies will convert this selective investment into large-scale investment between 2025 and 2026.

Once the market shifts from focusing only on “high-end memory expansion” to general upward expansion by everyone, then the dangerous window I mentioned in my previous article will draw ever closer.

If we are going to follow up, I will only focus on these few matters

Metric	Current Implication	What it suggests if things start to sour/change
SK hynix / Micron’s capex guidance	Still boosting investment in AI memory, indicating the boom cycle is not over.	If capex expansion also targets standard DRAM / NAND, the seeds of oversupply risk begin to sow.
Share of HBM in DRAM revenue	High-value-added products are still driving up the profit

It is said that many people monitor the semiconductor cycle, developing the habit of looking at stock prices first, then checking the news, and only finally reviewing the financial reports.

However, if you truly want to pinpoint the time window this time, it is best to reverse the order.

First, look at how profits and product structures have changed according to the financial report; then look at where capex is being invested; finally, only then check whether the stock price has fully factored in/priced in two or three years of good growth.

SK hynix deserves to be singled out not because it is immune to cyclical downturns, but because during the most challenging memory market cycle of 2023, it provided a very standard answer:

We can scale back overall investments, but we cannot stop pursuing the few lines/trends that will generate the most profit in the next round.

This sentence might be more useful than many grand narratives of “semiconductor boom continuation.”

References

Writing Notes

Original Prompts

The previous articles suggested that the conclusion of this semiconductor cycle is unlikely to be in 2026. Since detailed financial data is lacking, I will write a new article supplementing the financial records of several major semiconductor players across multiple cycles. Specifically, Hynix—I recall news reports about Hynix expanding capacity during counter-cycles.

Writing Approach Summary

This piece does not repeat the cycle conclusions from the previous article; it only supplements details on financial reports, profit margins, and capital expenditure.
The main text intentionally places memory and logic/foundry side-by-side, but the focus is on observing changes within a single company across different cycles, rather than making forced comparisons.
Hynix’s “counter-cycle” status has been refined into more accurate descriptions: total investment shrinks, but HBM and DDR5 development remains continuous.
This article intentionally avoids dedicating a large section solely to Samsung, as that would pull the focus away from “why Hynix acts like a barometric indicator” back to broader comparisons of Korean semiconductor companies.
Spot price curves and equipment chains are also worth discussing, but we will omit them in this piece to prevent the single article from becoming too scattered.

Expanded Brainstorming

Direction	Inclusion Status in Main Body	Reason
Samsung single-column years financial data	No	Worth adding, but will stretch the scope into a comparison of two Korean giants, weakening the focus on Hynix.
Spot price, contract price, inventory days curve	No	Helpful for judgment, but requires more precise criteria and continuous updates; easy to lose focus in a single article.
Why TSMC survived 2019	Partially Included	Needs a control group to prove that “semiconductor leader” does not have the same financial flexibility.
Whether Micron’s revised upward estimate of capex will be a trap	Partially Included	This is an extension line from the previous article’s judgment, and viewing it with Hynix has more comparative value.
Expansion of local Chinese storage and mature processes	No	Important for the supply side, but if expanded in this article, the main focus will shift from Hynix to a full industry supply map.