South Korean chip giant SK Hynix Inc yesterday reported record quarterly profits, thanks to soaring demand for artificial intelligence (AI).
The world’s second-largest memorychip maker dominates the market for high-bandwidth memory (HBM) semiconductors and is a key supplier for Nvidia Corp.
Operating profit climbed almost 70 percent to 9.2 trillion won (US$6.7 billion) in the second quarter, with revenues coming in at 22.2 trillion won — both all-time peaks, the company said.
Photo: Reuters
It comes after Taiwan Semiconductor Manufacturing Co (台積電) last week announced a surge in net profit for the second quarter, topping forecasts, thanks to robust demand for AI technology, despite the threat of US tariffs on the critical sector.
SK Hynix added that net profit was up close to 70 percent from a year earlier at nearly 7 trillion won.
“Aggressive investment by global big tech companies into AI led to a steady increase in demand for AI memory,” the company said in a statement.
Shipments of DRAM and NAND flash topped forecasts, boosting the bottom line.
“SK Hynix foresees that increasing competition among big tech companies to enhance inference of AI models would lead to higher demand for high-performance and high-capacity memory products,” the company added.
Shares of the firms rose more than 3 percent in Seoul trading yesterday, but pared gains to close up 0.2 percent.
“Nvidia suppliers like SK Hynix will continue to enjoy strong demand in the coming months and years for memory chips due to the high memory content needed to make AI chips functional,” TechInsights Inc vice chairman and senior researcher G. Dan Hutcheson said.
Rising competition from rivals is its main risk factor, along with “saturation of the market as AI algorithms become more efficient as well as the uncertain impact of tariffs, the global trade war and the resultant potential for a global recession,” he said.
Experts attribute SK Hynix’s resilience to its growth in the DRAM market.
The firm took the lead in DRAM revenues in April, with a 36 percent market share, research firm Counterpoint said.
That surpassed South Korean rival Samsung Electronics Co for the first time — the first change in the top spot in more than four decades.
As the US has been threatening restrictions on semiconductor sales to China, customers’ pre-emptive purchases “to hedge against external risks” created a “more favorable environment” than expected, SK Hynix said in a conference call.
Despite the geopolitical situations, its production situation saw “no change,” the company added.
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