A：The executives presenting at the conference call include Pak Sohan, Head of IR at SK Hynix; President of Corporate Center SUNY Jong; CFO Kim Jo Hyun; Head of DRM Marketing P Jong Lo; Head of Nand Marketing Song Song SEO; and Head of HBM CSS and Marketing Team Gie.

A：The second quarter results include consolidated figures that are provisional in nature because the audit review has not yet been completed. Accordingly, they may change, and the risk associated with them is that they could vary depending on changes in the economic and market circumstances.

A：The company anticipates a structural shift in demand where both AI memory and conventional memory are growing together. As AI models improve and software optimization advances, the computational volume and cost per task are decreasing, which is expected to not only lower price and adoption barriers for AI services but also expand the user base and scope of applications.

A：Supplies and demands for both DRAM and Nand are expected to grow by mid and high percentages, respectively. However, improving the supply-demand balance in the near term is challenging due to the complexity of advanced processes applied to HBM and AI server memory and the lead times required for new production facilities. Consequently, the current supply conditions are expected to persist for a considerable period, and discussions regarding long-term contracts are ongoing.

A：The company is continuing investment plans to expand production capacity in the short term to enhance supply responsiveness, including pulling forward the massive production schedule for Mph in X and proceeding with investments for rapid capacity expansion following the clean room opening of the jumin fab 1 in early 2027. 2026 CapEx is expected to reach the high 40000000000001 range, and future plans include new investments for advanced packaging capabilities and a new domestic semiconductor cluster to meet long-term demand.

A：The company aims to maintain financial soundness and shareholder returns by expanding investments in high-profitability growth opportunities while ensuring a stable financial structure for business operations amidst market fluctuations. They are exploring various execution measures for shareholder returns and believe their significantly strengthened cash generation capabilities will allow meaningful expansion of shareholder returns while achieving investment goals and maintaining financial soundness.

A：The company believes that the transition to more efficient AI models will not slow down AI infrastructure investment but rather accelerate the utilization of existing AI infrastructure and support broader accessibility and adoption. They expect the demand for AI infrastructure to remain solid and for memory demand, including HBM for AI compute and server DRAM for general AI support, to continue expanding due to ongoing AI competition among cloud service providers and growth in AI services and data.

A：The company's long-term memory demand outlook is based on structural growth in memory demand driven by AI expansion and ongoing discussions with key customers on their longer-term demand.

A：The company's collaboration with customers is evolving beyond transactional relations into more strategic long-term partnerships. There is a stronger intent by the customers to enter long-term agreements and build partnerships, which signifies sustained demand from the AI ecosystem.

A：The company has visibility into market demand secured through partnerships with customers, which influences the planning of actual capital investment and production ramp-up. The implementation will consider demand visibility, investment efficiency, and other factors.

A：The company does not believe its medium to long-term investment plans will lead to oversupply as the capacity expansion will be executed flexibly in alignment with confirmed customer demand.

A：The company's LTA framework includes contract terms that are typically around 5 years, but specific conditions may vary depending on the customer and product. The pricing structure is not uniform, and discussions are ongoing to adopt a range of pricing mechanisms that can better respond to price volatility, reducing short-term market volatility uncertainty while enhancing long-term business stability.

A：The agreements include mechanisms such as deposits to strengthen contract implementation and demand visibility. Specific terms will vary based on each customer's requirements and contract structure.

A：The company intends to maintain LTA coverage at an appropriate level based on market conditions and customer demand. This approach is expected to enhance earnings downside resilience while maintaining flexibility to capture incremental demand and growth opportunities.

A：DRAM ASP growth in the second quarter fell below market expectations due to some high-value-add products being pushed back into the second half and changes in the product portfolio that affected the blended ASP. These factors are expected to be gradually addressed in the second half.

A：The outlook for the second half of the year regarding DRAM includes higher shipment volumes and a continued improvement in the product mix. The increase in HBM 4 shipments and the ramp-up of 1 C nanometer conventional DRAM are expected to lead to higher bit growth. This will result in higher shipment volumes and an improvement in the product mix, which will positively impact the blended ASP and push up both shipment volumes and earnings.

A：The differentiators that enable the company to maintain leadership in the HBM market include delivering required performance, the ability to supply at scale with stable yield and consistent quality. The company has consistently demonstrated these capabilities since the HBM 2E generation and is focused on expanding its competitiveness through time to market, product performance, mass production, yield quality, and customer trust. HBM 4 mass production for key customers has begun, with a focus on production capacity ramp-up and customer trust. Next-generation technologies like I-HBM are being developed to enhance thermal dissipation and system stability in high-performance environments. This strategy is expected to sustain leadership in the HBM market as the AI market expands.

A：HBM pricing discussions consider a comprehensive set of factors, including conventional DRAM pricing and market supply and demand, the resources and opportunity costs related to HBM production, technical complexity, and the value that the products deliver to customers.

A：The company's medium to long-term investment strategy is to make timely investments based on AI memory demand while considering business visibility and investment efficiency. They intend to secure additional manufacturing capacity through an efficient combination of maximizing existing production site utilization and developing new infrastructure. In Korea, they will continue to strengthen Eton and Union for next-generation DRAM and AI memory and enhance Chengdu's capability for NAND and advanced packaging. They will also actively secure the manufacturing base and infrastructure needed to support future demand.

A：The company plans to address the varying requirements in the AI storage market by providing a storage portfolio that is customized to each customer's workload. They are focusing on developing new-tier AI storage solutions for emerging applications like Kv cache offloading and near GPU storage, rather than being limited to any single NAND technology. They aim to deliver the most efficient performance for each customer workload by combining the strengths of NAND with firmware.

A：Upon the completion of the stock listing on the Korea Exchange, ADRs can be freely converted to stocks. However, conversions of stocks into ADRs may be limited due to the conversion process and the conversion limit. The maximum number of ADRs outstanding cannot exceed the ADR conversion limit, which is currently set at 17 million 790,000 shares. The company is evaluating whether to increase the proportion of ADRs in the future, taking into account the relevant regulatory environment and other factors, but no decisions have been made at this time.

A：The company is currently evaluating various options for additional shareholder returns, but due to regulatory requirements and procedural restrictions related to the ADR offering, they are unable to disclose new material information not included in the offering document. Specific details regarding the format, size, or timing of any additional shareholder return cannot be provided at this time, but the company intends to communicate its plans to the market once they are finalized. The focus remains on executing investments to support growth, maintaining a sound financial structure, and pursuing a capital allocation strategy that can enhance shareholder value through sustainable cash generation.