SK Hynix Erases Stone Age Selloff as Iran Accepts Ceasefire and Q1 Profit Hits Record

The Ceasefire, Take Three

On April 7, Trump suspended US military operations against Iran, conditional on Tehran reopening the Strait of Hormuz. Iran accepted, agreeing to a two-week ceasefire with negotiations set to begin Friday in Islamabad. Iran's foreign minister confirmed that safe passage through the strait would be possible during the pause via coordination with Iranian armed forces.

SK Hynix's underlying shares closed at 916,000 won on April 7, up 3.4%, then extended to 971,000 won in April 8 pre-market trading — a 6% overnight move. Samsung followed at 205,500 won, up 4.6%. The SKHX perp captured the combined session and overnight gain plus won appreciation against the dollar, printing a 14.67% move over 21 hours.

This is the third act of a now-familiar sequence. On April 1, ceasefire signals sent SK Hynix up 11% and the SKHX perp up 12.8%. The next day, Trump's national address promising to "send Iran back to the Stone Age" erased the entire move, taking the perp down 14.43%. Now the stock has recovered past its pre-reversal level — but traders know exactly what the downside playbook looks like. They lived it six days ago.

Record Earnings Underneath

The difference between this recovery and the April 1 bounce: the fundamental picture has shifted materially.

Brokerages now forecast SK Hynix's Q1 operating profit at roughly 40 trillion won — an 88% increase from Q4's 19.1 trillion won and well above prior consensus. Daishin Securities has the high mark at 39.6 trillion, Mirae Asset at 38.9 trillion. The driver is straightforward: DRAM contract prices jumped 39.8% within Q1 while NAND prices tripled, up 208.8%, according to DRAMeXchange data. HBM and server DRAM demand from the shift toward agentic AI inference is absorbing supply as fast as SK Hynix can produce it.

Separately, SK Hynix is in final negotiations with Microsoft for a three-year DDR5 supply contract valued in the tens of billions of dollars. Google is negotiating a parallel deal. Both contracts reportedly include price floor guarantees and 10-30% prepayment deposits — terms that would have been unthinkable two years ago. Big Tech is treating DRAM as a strategic reserve, not a commodity. Official Q1 results drop between April 27-30.

Same Trade, Different Floor

The March-April whipsaw in Korean equities has been driven almost entirely by geopolitics — the KOSPI dropped 19% in March on Middle East escalation, then bounced and reversed twice in early April on ceasefire headlines.

But the fundamental backdrop for SK Hynix has been strengthening through all of it. Q1 memory prices rose faster than anyone modeled. Microsoft and Google are locking in multi-year supply at unprecedented terms. Analysts who were targeting 1.45 million won have started revising toward 1.6 million, with Hana Securities citing a potential US ADR listing as an additional structural catalyst.

The risk is the same as it was on April 1: geopolitics can erase these gains overnight. The ceasefire is only guaranteed for two weeks. But if talks in Islamabad hold, SK Hynix trades into its April 27 earnings report sitting on record profit with a locked-in demand outlook. If they don't, the memory fundamentals provide a floor that March's selloff didn't have.

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