## SK Hynix Rides the AI Wave to Record-Breaking Profits: HBM Sales Soar 70%
SK Hynix, a major force in the memory chip market and a key supplier to the likes of Nvidia, has just announced a record-breaking quarterly profit. The driving force behind this remarkable achievement? The explosive growth of artificial intelligence (AI) technologies.
The South Korean semiconductor giant saw its revenue climb to a staggering 17.5731 trillion won ($12.65 billion), marking a 7% increase from the previous quarter. This surge in revenue was accompanied by a substantial jump in operating profit, reaching 7.03 trillion won ($5.06 billion), and a net profit of 5.7534 trillion won ($4.14 billion). These figures represent significant gains compared to the previous year, solidifying SK Hynix’s position as a leading player in the rapidly evolving AI landscape.
This latest success can be attributed to the company’s strategic focus on high-performance memory products. SK Hynix’s sales of premium memory solutions like High Bandwidth Memory (HBM) and enterprise solid-state drives (eSSD) are skyrocketing, driven by the insatiable demand for AI servers. HBM, a key component in AI systems, accounted for an impressive 30% of SK Hynix’s total DRAM revenue in the third quarter, with sales experiencing a remarkable 70% surge compared to the previous quarter. The company anticipates that HBM’s share will rise to 40% in the fourth quarter as it ramps up production of its latest 8-layer and 12-layer HBM3E models. This aggressive expansion is a clear indicator of the strong demand coming from data centers and AI developers worldwide.
Kim Woohyun, Vice President and Chief Financial Officer at SK Hynix, emphasized the company’s dominance in the AI memory sector, stating, “SK Hynix has solidified its position as the world’s No. 1 AI memory company by achieving the highest business performance ever in the third quarter of this year.” He further highlighted the company’s commitment to maintaining profitability while securing stable revenues through flexible product and supply strategies aligned with market demand.
SK Hynix is confident that the demand for AI memory will remain robust in 2025, fueled by advancements in generative AI and artificial general intelligence. The company also projects steady growth in the PC and mobile markets, although these segments are expected to lag behind the booming AI sector. To capitalize on the evolving market dynamics, SK Hynix plans to expand its NAND operations by focusing on high-capacity eSSD sales and optimizing production efficiency. The company also intends to continue its transition to more advanced DRAM technologies, further solidifying its leadership position in the AI memory market.
This impressive performance comes after a period of volatility for SK Hynix. In September, the company’s shares experienced a sharp decline following a downgrade by Morgan Stanley, which cited concerns about potential memory market deterioration. However, the company’s fortunes quickly reversed when it announced the mass production of its latest high-bandwidth memory chips. This crucial development, which positioned SK Hynix at the forefront of meeting the growing demand driven by AI advancements, led to a significant surge in the company’s share price.
Analysts have long been optimistic about SK Hynix’s future, predicting that the company will continue to benefit from the increasing demand for AI technology. In July, both Goldman Sachs and Citigroup raised their stock-price targets for SK Hynix, citing the high potential of AI and the anticipation of positive surprises in the company’s earnings.
SK Hynix’s stock is currently trading at 1,98,300 won, experiencing a 1.17% surge on Thursday. The stock has witnessed a remarkable 39.26% year-to-date gain, demonstrating the market’s confidence in the company’s ability to capitalize on the AI revolution. With its commitment to innovation and strategic focus on AI-centric memory solutions, SK Hynix appears poised to remain a major player in the rapidly evolving technology landscape.