Key Points:
- SK Hynix reports a net profit of 1.92 trillion South Korean won in the first quarter, marking a significant turnaround from the previous year.
- Revenue surged by 144%, attributed to increased sales of AI server products and high-bandwidth memory chips.
- SK Hynix plans to increase the supply of HBM3E and introduce 32GB Double Data Rate 5 products to meet the growing demand for AI memory.
- SK Hynix announces plans to build a new fab in South Korea and collaborates with TSMC to develop HBM4 chips, aiming to capture the expanding demand.
South Korean memory chipmaker SK Hynix has reported a net profit of 1.92 trillion South Korean won ($1.39 billion) in the first quarter, marking a significant turnaround from the loss of 2.58 trillion won recorded in the same period last year. This positive income marks a pivotal moment for SK Hynix, representing its first profitable quarter since the third quarter of 2022.
The resurgence in profit is attributed to a remarkable increase in revenue, which stood at 12.43 trillion won, marking a 144% surge compared to the previous year. This surge in revenue is the highest recorded since the second quarter of 2022. SK Hynix credits this robust performance to the surge in demand for AI server products driven by its leadership in AI memory technology, including high-bandwidth memory.
As the world’s second-largest memory chipmaker after Samsung Electronics, SK Hynix is pivotal in supplying high-bandwidth memory chips catering to AI chipsets for companies like Nvidia. The explosive demand for AI chipsets has significantly boosted the high-end memory chip market, benefiting players like SK Hynix and Samsung Electronics.
To address the increasing demand for AI memory, SK Hynix announced plans to ramp up the supply of HBM3E, the latest generation of high-bandwidth memory for AI applications. Additionally, the company will introduce 32GB Double Data Rate 5 products this year to strengthen its position in the high-capacity server DRAM market.
Looking ahead, SK Hynix projects steady growth in the overall memory market, which is driven by rising demand for AI memory. Furthermore, the conventional DRAM market is expected to recover in the second half of 2024. Despite the positive financial results, SK Hynix shares declined more than 4% on Thursday morning. However, over the past year, the company’s shares have surged by more than 100%.
In response to the growing demand for AI chips, SK Hynix announced plans to build a new fab in South Korea, scheduled for completion by November 2025. This new facility aims to increase the production of next-generation DRAM, including HBM, to meet the proliferating demand for AI chips. The long-term investment for this project is estimated to exceed 20 trillion won.
Moreover, SK Hynix is collaborating with TSMC, the world’s largest contract chip manufacturer, to develop high-bandwidth memory 4 chips and next-generation packaging technology. Leveraging TSMC’s leading-edge processes, mass production of the HBM4 chips will commence in 2026.
