SK Hynix Inc. Signed on Monday, April 22, 2024, at the Company’s office in Seongnam, South Korea. SK Hynix is scheduled to release earnings data on April 25. Photographer: SeongJoon Cho/Bloomberg via Getty Images
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South Korean memory chip maker SK Hynix on Thursday reported a net profit of 1.92 trillion South Korean won ($1.39 billion) in the first quarter, down from a loss of 2.58 trillion won in the same period a year earlier. is changing the
It was the first positive earnings since the third quarter of 2022, LSEG data showed. SK Hynix has posted five straight quarters of net losses as the memory chip market slumps.
Revenue in the first quarter was 12.43 trillion won, up 144% from a year ago. This was the highest revenue since the second quarter of 2022, according to LSEG data.
SK Hynix attributed the strong performance to “increased sales of AI server products supported by its leadership in AI memory technology including high-bandwidth memory,” as well as efforts to boost profitability.
SK Hynix is the world’s second-largest memory chip maker after Samsung Electronics and supplies high-bandwidth memory chips for AI chipsets for companies such as Nvidia.
Explosive demand for AI chipsets boosted the high-end memory chip market, benefiting players like SK Hynix and Samsung Electronics.
Large language models such as ChatGPT – which has led to increased adoption of AI – require very high-performance memory chips because such chips allow these models to remember past interactions and user preferences. allows for a human-like response.
To meet demand for AI memory, the firm said it plans to increase supply of HBM3E – the latest generation of high-bandwidth memory for AI. SK Hynix said it will also introduce 32GB double data rate 5 products this year to strengthen its leadership in the high-capacity server DRAM market.
Chief Financial Officer Kim Woohyun said, “We will continue to work to improve our financial results while maintaining our commitment to delivering the industry’s best-performing products at the right time and profit first.
The firm projects the overall memory market to grow gradually in the coming months amid growing demand for AI memory, while the traditional DRAM market starts to recover from the second half of 2024.
The consumer electronics pandemic forced companies to stockpile memory chips. But macroeconomic uncertainties such as inflation led consumers to cut back on purchases of such consumer goods, reducing demand and driving up memory chip prices.
To address the excess inventory, companies such as SK Hynix cut its production of memory chips.
SK Hynix shares fell more than 4% on Thursday morning, although in the past year, they have jumped more than 100%.
The firm has made recent announcements to meet the demand for AI.
The firm said on Wednesday it plans to build a new fab in South Korea, with an expected completion date of November 2025, to ramp up production of next-generation DRAM, including HBM for AI chips. to meet the growing demand.
SK Hynix said the total investment will exceed 20 trillion won in the long term.
SK Hynix is also partnering with TSMC, the world’s largest contract chipmaker, to produce high-bandwidth Memory 4 chips and next-generation packaging technology. Mass production of HBM4 chips is expected to begin in 2026.
According to an April 19 statement, SK Hynix will take advantage of TSMC’s flagship process.