[News Article] SK hynix reports highest profit in 6 years on robust AI chip sales
SK hynix reports highest profit in 6 years on robust AI chip
sales
The Korea Herald - SK hynix Inc. reported its highest
quarterly profit in six years on Thursday, fueled by solid sales of its premium
memory chips used in artificial intelligence (AI) computing. The world's second-largest memory chipmaker posted an
operating profit of 5.46 trillion won ($3.95 billion) for the April-June
period, compared with a loss of 2.88 trillion won a year ago, the company said
in a regulatory filing. It marked the largest quarterly operating profit since the
third quarter of 2018, when SK hynix reported 6.47 trillion won in operating
profit. Its revenue surged 124.8 percent to a record 16.42 trillion
won, while its net profit reached 4.12 trillion won, shifting from a loss of
2.98 trillion won a year earlier. The earnings beat market expectations. The average estimate
of net profit by analysts stood at 3.85 trillion won, according to a survey by
Yonhap Infomax, the financial data firm of Yonhap News Agency. SK hynix attributed the strong bottom line to demand for AI
memory chips, including high bandwidth memory products and embedded solid state
drives (eSSDs), and a rebound in prices of NAND flash memory. "Continuous rise in overall prices of DRAM and NAND
products with strong demand for AI memories including HBM led to a 32 percent
increase in revenues compared to the previous quarter," SK hynix said in a
release, adding favorable exchange rates also mattered in the second quarter. In particular, sales of HBM soared more than 80 percent
on-quarter and 250 percent on-year following the mass production of latest
HBM3E products in March. For the NAND business, the company said sales of eSSD
products vaulted 50 percent on-quarter, turning to profit for two straight
quarters, on a steady increase in the average selling price (ASP) of NAND
products. SK hynix said the demand for AI server memory is forecast to
continue to rise in the second half, and sales of high-performance memory
products will also increase thanks to new PC and mobile products supporting
on-device AI. "We plan to continue our leadership in the HBM market
by mass-producing 12-layer HBM3E products, which the company provided samples
to major customers, in the third quarter," it said. SK hynix is a key HBM supplier to the US AI chip giant
Nvidia Corp., a major player in the artificial intelligence (AI) semiconductor
market with its graphics processing units. In the second half of the year, the company plans to launch
32 gigabit DDR5 server D-RAMs and other memory products, such as MCRDIMM, for
high-performance computing to maintain its competitive advantage. It will also expand the sales of high-capacity eSSD
products, which are in growing demand, to lead the market. This year's revenues
from eSSD sales are expected to quadruple from a year ago, it added. Consequently, the better-than-expected second-quarter
earnings helped market analysts predict SK hynix will post annual sales of 69.2
trillion won for 2024, up from 32.7 trillion won last year. "SK hynix's advantage in the high-end DRAM market will
continue for a while," said Kim Woon-ho, an analyst from IBK Securities
Co. "Its product mix will outperform competitors, and favorable ASP will
also help." Separately, SK hynix said it is working on the construction
of its new facility in Cheongju, some 114 kilometers south of Seoul, aimed at
keeping up with the growing demand for AI memory chips. The Cheongju plant is
scheduled to start mass production in the second half. The first fab in the Yongin semiconductor cluster is planned
to start construction in March next year and be completed in May 2027, it
added. (Yonhap) Source: https://www.koreaherald.com/view.php?ud=20240725050171\
2024.07.25
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