KRX:000660 SK Hynix, a leading maker of memory chips and a major supplier to Nvidia Corp. (NASDAQ: NVDA), posted quarterly profits that should be credited to the insatiable demand for artificial intelligence technology.
What happened: Samsung’s South Korean semiconductor rival posted a revenue of 17.5731 trillion won ($12.65 billion), a 7% increase from the previous quarter. Operating profit jumped to 7.03 trillion won ($5.06 billion), and net profit reached 5.7534 trillion won ($4.14 billion), gaining significantly from last year.
The revenue is SK Hynix’s highest on record. It is even more than the previous record of 16.4233 trillion won set in the second quarter of 2024.
The company attributes the revenue growth to the continued sales of premium memory products, high-bandwidth memory, and enterprise solid-state drives—products that address the surging demand for AI servers.
Third-quarter sales from HBM accounted for 30 percent of SK Hynix’s total DRAM revenue, and product sales jumped more than 70 percent over the quarter. The company expected HBM to rise to 40 percent in the fourth quarter as it steps up the production of the newer 8-layer and 12-layer HBM3E models, which showed strong demand from data centers and AI developers.
“SK Hynix has become the No.1 AI memory firm in the world by recording the highest business performance so far in the third quarter of this year,” said Kim Woohyun, Vice President and Chief Financial Officer at SK Hynix. “We will maximize profitability while ensuring the stable acquisition of revenues by taking flexible product and supply strategies according to market demand.”
SK Hynix believes that the trend for AI memory will be vital in 2025 as generative AI progresses further and artificial general intelligence emerges. The PC and mobile markets, the laggards relative to the AI sector, are expected to grow solidly over the coming period.
The company aims to boost its operations with NAND by expanding the sales of high-capacity eSSDs and optimizing production efficiency. It will also transform more into highly advanced DRAM technologies to maintain its lead in the AI memory market.
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Why It Matters: SK Hynix has witnessed topsy-turvy times. Just last month, the company’s shares slumped to a new low in February after Morgan Stanley downgraded them. An investment bank said, “Memory conditions are starting to decline,” suggesting that it would not be easy for SK Hynix to keep gaining revenues and growing margins.
However, the company’s fortunes changed very fast when it announced the mass production of the latest high-bandwidth memory chips. The move placed SK Hynix at the top of the race to cater to the increasing demand driven by AI-based developments, and hence, the company enjoyed a 9% hike in its shares.
Analysts have generally been quite upbeat on SK Hynix’s prospects and even predict that the company will be one of the larger beneficiaries of soaring demand for AI technology. For instance, in July, both Goldman Sachs and Citigroup raised their targets on the stock price of SK Hynix based on high expectations for AI and some positive surprises regarding the company’s earnings.
Price Action: SK Hynix’s stock currently trades at 1,98,300 won per piece, with a gain of 1.17% on Thursday. According to data from Benzinga Pro, the stock has surged 39.26% so far this year.