Key Points
- SK Hynix posted a record 7 trillion won ($5.07 billion) operating profit in Q3, a sharp recovery from a year earlier loss.
- Strong demand for high-bandwidth memory (HBM) chips, driven by AI technologies, boosted SK Hynix’s profits, with sales increasing by over 330% year over year.
- SK Hynix has outperformed Samsung and Micron due to its early investments in HBM technology and strong positioning in the AI-driven chip market.
- SK Hynix expects HBM sales to make up 40% of its DRAM revenue in Q4 and anticipates further growth in AI-related memory chip demand next year.
South Korea’s SK Hynix, the world’s second-largest memory chipmaker, reported a record-breaking quarterly operating profit of 7 trillion won ($5.07 billion) for the July-September period, a dramatic turnaround from its 1.8 trillion won loss a year earlier. The company surpassed market expectations, with analysts predicting an average profit of 6.8 trillion won, according to LSEG SmartEstimate.
This remarkable performance is largely driven by SK Hynix’s strong sales of high bandwidth memory (HBM) chips, a key component used in generative AI chipsets supplied to companies like Nvidia. HBM sales surged over 70% compared to the previous quarter and more than 330% year-over-year. As AI-driven demand for advanced memory chips continues to grow, SK Hynix has positioned itself as a leader in the market, outperforming rivals Samsung Electronics and Micron Technology in recent quarters.
The company’s early investment in HBM chip development has paid off significantly, allowing it to benefit from the global appetite for high-end memory chips. HBM sales now account for 30% of SK Hynix’s DRAM revenue, and the company expects this share to rise to 40% in the fourth quarter. SK Hynix predicts further growth in memory chip demand for AI servers as global tech firms continue to develop generative AI technologies.
In addition to its stellar profit performance, SK Hynix’s revenue for the third quarter rose by 94% year-on-year, reaching 17.6 trillion won. Its stock has also seen impressive growth, jumping 38.5% this year, in stark contrast to Samsung Electronics, whose stock has slumped by 24.7% over the same period.
SK Hynix’s leadership in HBM technology was further solidified last month when it announced the mass production of its HBM3E 12-layer chips, with plans to supply these latest products to customers by the end of the year. Meanwhile, its larger competitor, Samsung, has struggled to make headway in the high-end chip market. Earlier this month, Samsung warned that its third-quarter profit would fall below market expectations, citing challenges in its efforts to catch up in the AI chip supply chain.
As the race for dominance in the AI-driven chip market heats up, SK Hynix’s strong position and continued investment in advanced memory technology signal further growth for the company in the coming years.
