SK Hynix Posts Largest Quarterly Profit in Six Years Amid AI Boom
SK Hynix reported operating profit of KRW 5.47 trillion in the second quarter of this year, the highest profit since the third quarter of 2018.
SK Hynix of South Korea reported its financial performance for the second quarter of this year.
According to the report, SK Hynix's revenue in the second quarter increased by 125% year-on-year, reaching a record high of 16.4 trillion Korean won. The operating profit was 5.47 trillion Korean won (3.96 billion US dollars), the highest profit since the third quarter of 2018. By comparison, the same period last year saw a loss of 2.9 trillion Korean won.
The company predicts an increase in demand for AI chips in the second half of the year, particularly for high bandwidth memory (HBM) used in generative AI chipsets.
After suffering losses last year, SK Hynix has achieved its third consecutive quarter of profitability.
As the world's second-largest memory chip manufacturer, SK Hynix has benefited the most from the demand for high-end chips driven by artificial intelligence and enterprise solid state drives (ESSDs), thanks to its early entry into these fields and significant investments.
SK Hynix's Chief Financial Officer Kim Woohyun stated in a statement, "The company will further consolidate its leadership position in the AI memory product field based on a healthy financial framework.
As Nvidia's main HBM chip supplier, SK Hynix dominates the HBM market, competing with American company Micron and domestic Korean giant Samsung Electronics. Nvidia holds over 80% of the AI processor market share.
It is reported that SK Hynix has been producing the fifth generation HBM chip (HBM3E) on a large scale since March this year and has preliminarily shipped it to Nvidia.
According to Shinhan Securities' prediction, by the end of 2024, HBM chips may account for 20% of SK Hynix's DRAM chip revenue, as Nvidia may accelerate its plans for the next generation of GPUs to meet the growing demand for generative AI.
SK Hynix CEO Kwak Noh Jung announced in May that the company's HBM chips have been sold out, and the supply for 2025 is also close to being sold out.
As one of the important investment choices in the Korean AI wave, SK Hynix's stock price has risen by 47% so far this year.
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