SK hynix sees record Q2 earnings but Hyundai Motor Group profits tumble

SK hynix reported record preliminary earnings and profit in the second quarter due to high demand in premium AI chips.

However, Hyundai Motor Group saw a decline in profit due to the 25% U.S. tariffs on automobiles.

Park Jun-han reports.

South Korean tech giant SK hynix reported record-breaking preliminary second-quarter earnings on Wednesday.

The driving force behind SK hynix's strong earnings was its competitiveness in high-value, high-bandwidth memory — a key product in the AI sector.

SK hynix reported an operating profit of 9-point-2 trillion won or some 6-point-7 billion U.S. dollars, up 68-point-5 percent compared to the second quarter of last year.

Its revenues hit a record 22-point-2 trillion won, or 16-point-2 billion dollars, a 35-point-4 percent on-year surge.

SK hynix's dominance in premium HBM chips has propelled its earnings, as it rides the AI wave by supplying tech giants like NVIDIA, Broadcom, and Amazon.

Meanwhile, Hyundai Motor Group posted a 15-point-8 percent drop in operating profit.

The 3-point-6 trillion won operating profit, roughly 2.6 billion dollars is the steepest decline in five years,

This comes despite record revenues of 48-point-2 trillion won, up 7-point-3 percent.

The main reason for this disparity is the 25 percent U.S. tariff on automobiles imposed since April, which has hurt the company's profitability despite robust U.S. sales as consumers bought cars early to avoid expected price increases.

Hyundai's global sales grew by point-8 percent to 1-million-65-thousand units, fueled by a 36-point-4 percent increase in eco-friendly vehicle sales, particularly hybrid cars.

However, the costs of tariffs and stronger incentives to stay competitive in the market have squeezed profits, causing the operating profit margin to fall to 7.5 percent.

"In the case of Hyundai and Kia, they haven't raised their U.S. selling prices despite the 25% tariff, essentially not factoring the tariff into their pricing. That puts pressure on their profits, and if the situation continues, it will remain a disadvantage for Hyundai."

With just eight days left until the August 1 reciprocal tariffs deadline, attention is on how any potential deal will impact Korea's main exports.

Park Jun-han, Arirang News.