South Korea’s SK Hynix (000660.KS) posted its highest quarterly profit since 2018 on Thursday, attributing the surge to strong demand for AI chips, including high bandwidth memory (HBM) used in generative AI chipsets, supplied to Nvidia (NVDA.O).
“AI demand continues to grow above expectations… We expect next year’s HBM shipments to more than double this year’s,” said Kim Kyu Hyun, Head of DRAM Marketing, during an earnings call.
The world’s second-largest memory chip maker has significantly benefited from the growing demand for high-end chips and enterprise solid-state drives (eSSDs), thanks to its early investment in these segments. The company reported an operating profit of 5.47 trillion won ($3.96 billion) for April-June, its highest since Q3 2018. This compares with a loss of 2.9 trillion won a year earlier and aligns with the LSEG SmartEstimate, which is based on the most consistently accurate analysts. Revenue rose 125% to a record 16.4 trillion won.
AI DEMAND
Prices have increased due to the soaring demand for high-end DRAM chips like HBM, used in data center servers and AI-powered devices. “DRAM prices are rising despite the lack of complete recovery in traditional buyer demand, as chipmakers focus on HBM production,” said CFO Kim Woohyun.
In March, SK Hynix began mass production of fifth-generation HBM chips, known as HBM3E, with initial shipments going to Nvidia. On Thursday, the chipmaker announced plans to ship the next versions of HBM chips – the 12-layer HBM3E starting in Q4 and HBM4 in the second half of 2025.
“SK Hynix is positioning itself to maintain technical leadership and stay ahead of competitors,” said analyst Lee Min-hee at BNK Investment & Securities. “However, investor expectations are so high they may be difficult to meet, and in the short term, the stock price may not rise significantly.”
