SK Hynix Inc warned of increased volatility in the second half of this year despite resilient demand for artificial intelligence (AI) memory chips from big tech providers, reflecting the uncertainty surrounding US tariffs.
The company reported a better-than-projected 158 percent jump in March-quarter operating income, propelled in part by stockpiling ahead of US President Donald Trump’s tariffs.
SK Hynix stuck with a forecast for a doubling in demand for the high-bandwidth memory (HBM) essential to Nvidia Corp’s AI accelerators, which in turn drive giant data centers built by the likes of Microsoft Corp and Amazon.com Inc.
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That SK Hynix is maintaining its HBM shipment growth guidance is encouraging, SLSA Securities Korea analyst Sanjeev Rana said.
“The key question on everyone’s mind is: ‘How will the tariffs impact tech demand in the later part of the year?’” Rana said.
It is difficult to assess the impact of US tariffs at this point, SK Hynix chief financial officer Kim Woo-hyun told analysts during an earnings conference call.
“With the expansion of protectionist policies such as tariff regulations and export restrictions, it has become more challenging than ever before to predict future market conditions,” he said.
While US clients account for about 60 percent of the company’s revenue, the percentage of direct exports to the US is “not that high,” with memory shipments for US customers often going to locations outside the country, he said.
For the March quarter, SK Hynix reported a better-than-expected operating income of 7.44 trillion won (US$5.2 billion) on a 42 percent rise in revenue. Customers asking for expedited shipments of advanced chips, as well as memory used in PCs and smartphones, helped the company clock its second-highest quarterly performance, on the heels of record revenue and operating profit in the prior quarter.
SK Hynix executives also sought to reassure investors that tariff-driven stockpiling would not lead to excess customer inventory, which could weaken demand and hurt earnings in the second half of the year. Chipmakers are more likely to factor in market uncertainties and temper production plans, limiting the size of possible supply gluts or sudden drops in demand, they said.
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“This has led us to believe that there’s no doubt that HBM will continue to experience strong long-term growth in demand,” one executive said.
SK Hynix is actively working with Nvidia on its next-generation HBM4 and is expanding factories focused on high-end DRAM to cement its lead. Its M15X plant, under construction in the southern South Korean city of Cheongju, is on track to open in the fourth quarter, the company said.
Total investment on the site is projected to be more than 20 trillion won.
SK Hynix said sales of 12-layer HBM3E — a cornerstone of the company’s AI memory strategy — are expected to increase to account for more than half of total HBM3E revenues in the second quarter. That chip is currently the most advanced HBM on the market that works alongside Nvidia’s graphic processing units.
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