SK Hynix logo displayed on a phone screen as seen in this illustration photo taken in Krakow, Poland on January 30, 2023.
Jakub Porzycki | Nurphoto | Getty Images
South Korea’s SK Hynix, one of the world’s largest memory chipmakers, on Thursday posted record quarterly profit, boosted by strong demand for its high bandwidth memory (HBM) used in generative AI.
Here are SK Hynix’s third-quarter results compared with LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate:
- Revenue: 17.57 trillion won ($12.7 billion) vs. 18.11 trillion won
- Operating profit: 7.03 trillion won ($5.08 billion) vs. 6.8 trillion won
Operating profit in the July-September quarter hit its highest level, rebounding from a loss of 1.8 trillion won during the same period last year.
Quarterly revenue grew about 94% year-on-year from 9.1 trillion won.
The South Korean chip giant is a key supplier to Nvidia and has benefitted from a boom in artificial intelligence servers.
SK Hynix said in its earnings release Thursday that demand for AI memory, particularly from data center customers, continued to be strong in the third quarter, allowing it to expand sales of premium products such as HBM.
HBM is a type of dynamic random access memory, known as DRAM, in which chips are vertically stacked to save space and reduce power consumption. DRAM is often used in laptops, workstations and PCs. SK Hynix, Micron Technology and Samsung Electronics are the three main manufacturers of HBM chips.
Sales of HBM products were also up more than 70% from the previous quarter and more than three times from the same period last year, with the company expecting continued growth.
“While the demand of memory for AI servers such as HBM and [high-density enterprise SSD] has grown noticeably this year, the company predicts that this trend will continue next year,” the firm said in a press release. Enterprise SSD is a data storage device for servers.
Generative AI continues to advance and large tech companies are investing to develop the technology supporting demand, the company said.
SK Hynix also forecasted that memory demand from the PC and mobile consumer product markets, which has been slower to recover from a downturn, will be on a steady growth path next year amid the emergence of AI-optimized devices.
“As the application of AI technology widens, the application of memory is also expected to broaden, leading to even more stable market growth for memory going forward,” said Kim Woohyun, vice president and chief financial officer at SK Hynix in an earnings call.
In 2023, the memory market experienced a severe downturn caused by oversupply, weak end-market demand and geopolitical tensions, according to Fitch Ratings.
The company said last month that it has started mass production of its latest version of HBM chips and aims for delivery by the end of the year.
SK Hynix shares initially dropped 0.4% when the markets opened in South Korea on Thursday, before recovering to trade up 1.3%.