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.
Photo: AFP
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.
DeepSeek’s low-cost models have also spurred companies and governments around the world to invest more in AI infrastructure, according to the Icheon, South Korea-based company.
“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.
NO BREAKTHROUGH? More substantial ‘deliverables,’ such as tariff reductions, would likely be saved for a meeting between Trump and Xi later this year, a trade expert said China launched two probes targeting the US semiconductor sector on Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog integrated circuits (ICs) imported from the US. The investigation is to target some commodity interface ICs and gate driver ICs, which are commonly made by US companies such as Texas Instruments Inc and ON Semiconductor Corp. The ministry also announced an anti-discrimination probe into US measures against China’s chip sector. US measures such as export curbs and tariffs
The US on Friday penalized two Chinese firms that acquired US chipmaking equipment for China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), including them among 32 entities that were added to the US Department of Commerce’s restricted trade list, a US government posting showed. Twenty-three of the 32 are in China. GMC Semiconductor Technology (Wuxi) Co (吉姆西半導體科技) and Jicun Semiconductor Technology (Shanghai) Co (吉存半導體科技) were placed on the list, formally known as the Entity List, for acquiring equipment for SMIC Northern Integrated Circuit Manufacturing (Beijing) Corp (中芯北方積體電路) and Semiconductor Manufacturing International (Beijing) Corp (中芯北京), the US Federal Register posting said. The
READY TO HELP: Should TSMC require assistance, the government would fully cooperate in helping to speed up the establishment of the Chiayi plant, an official said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said its investment plans in Taiwan are “unchanged” amid speculation that the chipmaker might have suspended construction work on its second chip packaging plant in Chiayi County and plans to move equipment arranged for the plant to the US. The Chinese-language Economic Daily News reported earlier yesterday that TSMC had halted the construction of the chip packaging plant, which was scheduled to be completed next year and begin mass production in 2028. TSMC did not directly address whether construction of the plant had halted, but said its investment plans in Taiwan remain “unchanged.” The chipmaker started
MORTGAGE WORRIES: About 34% of respondents to a survey said they would approach multiple lenders to pay for a home, while 29.2% said they would ask family for help New housing projects in Taiwan’s six special municipalities, as well as Hsinchu city and county, are projected to total NT$710.65 billion (US$23.61 billion) in the upcoming fall sales season, a record 30 percent decrease from a year earlier, as tighter mortgage rules prompt developers to pull back, property listing platform 591.com (591新建案) said yesterday. The number of projects has also fallen to 312, a more than 20 percent decrease year-on-year, underscoring weakening sentiment and momentum amid lingering policy and financing headwinds. New Taipei City and Taoyuan bucked the downturn in project value, while Taipei, Hsinchu city and county, Taichung, Tainan and Kaohsiung
RSS