SK Hynix’s 72% Operating Margin Sets a New Benchmark, but a Subcontractor Revolt and Samsung’s Qualifying Test Darken the Outlook

Even as SK Hynix posts record operating margins that outshine Nvidia, the memory giant is facing two challenges that could test its grip on the AI-chip boom: a legal battle with its own logistics workers and a resurgent Samsung that has just cleared a crucial quality hurdle.

The stock slid 5% on Tuesday to close at 1,745,000 Won, trimming its year-to-date gain to 158%. The trigger was a report that Samsung had passed final qualification tests for its HBM4 chips with both Nvidia and AMD, with full-volume shipments possible as early as June. For SK Hynix, which currently supplies roughly 70% of Nvidia’s HBM orders, the news marks the first serious challenge to its dominance in high-bandwidth memory.

Labour unrest at the gates

While the financial numbers are stellar, tensions are building among the lower tiers of SK Hynix’s supply chain. The union at logistics subcontractor P&S Logis is preparing legal action against the parent company, arguing that profit-sharing has been deeply unequal. Full-time SK Hynix employees received bonuses worth millions of Won, whereas subcontractor workers got just 5 million to 6 million Won. The union is now invoking the “Yellow Envelope Act”, a law that took effect in March and allows direct collective bargaining with the parent company. The workers are demanding an end to “performance-based discrimination”.

The timing is awkward for SK Hynix. The company has just been named Korea’s best-run non-financial corporation by research firm CEO Score, pushing Samsung back to second place. The award reflects a booming top line: first-quarter 2026 revenue hit 52.58 trillion Won, up 198% year-on-year, while the operating margin reached an eye-watering 72% — above Nvidia’s 65% and a new industry record. For the full 2025-2026 fiscal year, operating profit hit a record 45 trillion Won, giving the company a market capitalisation of roughly $948 billion, within striking distance of the trillion-dollar mark.

Should investors sell immediately? Or is it worth buying SK Hynix?

Samsung’s yield gap and a walkout that could help

Samsung’s HBM4 qualification is real, but its current yield is below 60%, compared with SK Hynix’s 80% using 1c-DRAM technology. Still, Samsung has secured the green light for Nvidia’s upcoming Vera Rubin platform, a key step into the supply chain. If Samsung ramps HBM4 mass production in the second half of 2026, analysts estimate SK Hynix’s HBM market share could slip to 50-60%. The decision point is likely the fourth quarter.

But Samsung also faces its own labour cloud. A planned 18-day strike is set to begin Thursday, and analysts expect possible production disruptions. If customers shift orders, SK Hynix could benefit in the near term.

Spending big to stay ahead

SK Hynix is not waiting to see how the competition plays out. The first clean room at its new M15X fab will start operations in May 2026. The company has invested more than 20 trillion Won in the facility, which will produce HBM3E, HBM4 and eventually HBM4E. Mass production from that clean room is expected roughly six months after launch — around November.

On the funding side, a US initial public offering is planned for the second half of 2026, targeting up to $14 billion. Proceeds will go toward new facilities in South Korea and Indiana. The company also starts delivering samples of the next-generation HBM4E chips in the second half, with mass production scheduled for 2027.

Demand remains so strong that SK Hynix says its DRAM, NAND and HBM lines are completely sold out. Goldman Sachs in April raised its forecast for the 2026 DRAM supply gap to 4.9%, the tightest in 15 years. SK Group Chairman Chey Tae-won has predicted a global chip shortage lasting until at least 2030, and Microsoft, Google and Amazon are reportedly offering investment commitments to secure HBM capacity for years ahead.

SK Hynix at a turning point? This analysis reveals what investors need to know now.

What the analysts see

UBS raised its price target to 1.7 million Won in May and lifted 2026 and 2027 earnings forecasts by 22% and 29% respectively, calling it a memory super-cycle not seen in nearly three decades. SK Securities goes further, setting a target of 3 million Won — more than 50% above the current price — arguing that a trailing price-to-earnings ratio of roughly 5.2 is too low for a company of this quality.

The stock now sits about 11% below its all-time high of 1.976 million Won. Whether it reclaims that peak depends heavily on whether Samsung delivers this autumn or faces yet another delay.

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