South Korean semiconductor giant SK Hynix (000660.KS) announced its highest quarterly profit since 2018, driven by a surge in demand for AI chips, particularly high bandwidth memory (HBM) used in generative AI chipsets. The Nvidia (NVDA.O) supplier expects AI chip demand to increase further in the second half of the year.
This marks SK Hynix’s third consecutive profitable quarter following last year’s losses. As the world’s second-largest memory chipmaker, SK Hynix has leveraged its early entry and substantial investments in high-end chips and enterprise solid-state drives (eSSDs) to capitalize on the AI-driven market.
“The company will further solidify its position as a leader in AI memory products, supported by a stable financial structure,” stated Chief Financial Officer Kim Woohyun.
For the April-June quarter, SK Hynix reported an operating profit of 5.47 trillion won ($3.96 billion), compared to a loss of 2.9 trillion won a year earlier. This profit aligns with the expectations of LSEG SmartEstimate, which tends to favor analysts with consistent accuracy. Revenue surged 125% year-on-year to a record 16.4 trillion won.
The explosive demand for high-end DRAM chips, including HBM, as well as chips used in data center servers and devices with on-device AI services, has significantly boosted chip prices. SK Hynix is the leading supplier of HBM chips to Nvidia, competing with U.S. rival Micron (MU.O) and domestic giant Samsung Electronics (005930.KS). Nvidia holds approximately 80% of the AI chip market.
In March, SK Hynix began mass production of its fifth-generation HBM chips, known as HBM3E, with initial shipments to Nvidia. According to Shinhan Securities, HBMs could account for 20% of SK Hynix’s DRAM profits by the end of 2024, as Nvidia is expected to accelerate its next-generation GPU plans in response to the AI boom.
In May, SK Hynix CEO Kwak Noh-Jung reported that the company’s HBM chips were sold out for the current year and nearly sold out for 2025. SK Hynix, a top South Korean stock pick for the AI boom, has seen its shares rise 47% year-to-date.
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