SK Hynix Posts 44.2% Net Margin vs AMD's 12.5% in FY2025
SK Hynix generated 42.9 trillion won in net income with a 44.2% margin, outpacing AMD's 12.5% margin and $4.3 billion profit.
Key points
- SK Hynix reported a 44.2% net margin on 97.2 trillion won in revenue for FY2025.
- AMD generated $34.6 billion in revenue with a 12.5% net margin and $4.3 billion in net income.
- SK Hynix’s free cash flow was 18.2 trillion won, while AMD’s was $6.7 billion.
Advanced Micro Devices and SK Hynix delivered divergent financial results in their respective 2025 fiscal years, highlighting distinct profit structures within the AI hardware supply chain. According to data reviewed by fool.com, SK Hynix achieved a significantly higher net margin of 44.2% compared to AMD's 12.5%, reflecting the differing capital intensities of memory manufacturing versus processor design.
AMD reported total revenue of $34.6 billion, a 34.3% year-over-year increase, which supported a net income of $4.3 billion. The company’s balance sheet as of December 2025 showed a debt-to-equity ratio of 0.1x and a current ratio of 2.9x. Free cash flow stood at $6.7 billion, though stock-based compensation accounted for 21.2% of operating cash flow, a non-cash item added back in the cash flow statement.
SK Hynix leads in margin efficiency
SK Hynix generated revenue of 97.2 trillion Korean won, representing a 46.8% increase from the prior fiscal year. This revenue surge resulted in a net income of 42.9 trillion won, establishing a net margin of 44.2%. The company’s conservative balance sheet featured a debt-to-equity ratio of 0.2x and a current ratio of 1.9x, indicating ample short-term assets to cover immediate liabilities.
Free cash flow for SK Hynix reached approximately 18.2 trillion won, providing substantial capital for research and expansion into High Bandwidth Memory technology. This memory infrastructure is critical for training complex AI models, positioning the company as a key supplier for large-scale data centers despite the cyclical nature of the memory industry.
Operational risks and supply chain dependencies
AMD faces intense competition from Intel and Nvidia, which possess greater financial resources for research and customer influence. The company relies heavily on third-party manufacturing partners like TSMC, creating risks related to production capacity and supply chain delays. Geopolitical tensions and export controls on products sold to China have also resulted in inventory charges, while the business remains dependent on third-party software ecosystems.
SK Hynix operates in a highly cyclical market where memory prices fluctuate based on global supply and demand. Competition from manufacturers such as Samsung Electronics can trigger price wars that erode profitability. Unlike AMD, SK Hynix does not disclose individual major customers in its filings, though its products are vital for most large-scale data centers.
Strategic positioning in AI infrastructure
AMD designs processors for cloud servers and gaming consoles, securing a strategic partnership with OpenAI in late 2025 to supply graphics processors for AI infrastructure. Major clients include Microsoft and Sony. In contrast, SK Hynix focuses on storage components like HBM, which are indispensable for the memory bandwidth required by complex AI models, serving as the storage backbone for the same hardware ecosystem.
