The SK Hynix logo is 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 Hynixone of the world’s largest memory chipmakers, posted record quarterly earnings on Thursday, boosted by strong demand for its high-bandwidth memory (HBM) used in generative AI.
Here are SK Hynix’s third-quarter results compared to the LSEG SmartEstimate, which is weighted against analyst forecasts that are more consistently accurate:
- Income: 17.57 trillion won ($12.7 billion) versus 18.11 trillion won
- Operating result: 7.03 trillion won ($5.08 billion) versus 6.8 trillion won
Operating profit in the July-September quarter hit its highest level as it rose from a loss of 1.8 trillion won in 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 benefited from a boom in artificial intelligence servers.
SK Hynix said in its earnings announcement on Thursday that demand for AI memory, especially from data center customers, continued to be strong in the third quarter, allowing it to expand sales of premium products such as HBM and eSSD, a data storage device for servers.
HBM is a type of dynamic random access memory, known as DRAM, where chips are stacked vertically 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 also increased more than 70% compared to the previous quarter and more than tripled compared to the same period last year, with the company expecting continued growth.
SK Hynix stock
“While the demand for memory for AI servers such as HBM and [high-density enterprise SSD] has grown noticeably this year, the company predicts this trend will continue next year,” the company said in a press release.
Generative AI continues to evolve and major tech companies continue to invest to develop the technology, the company added.
SK Hynix also predicted that demand from the PC and mobile consumer product markets will be on a steady growth path next year amid the rise of AI-optimized devices.
Kim Woo-Hyun, SK Hynix’s head of DRAM marketing, told reporters in an earnings call that “the memory industry is finally passing through the severe downturn and is now entering the stage of full recovery.”
“To respond to next year’s demand, our company plans to expand stable production and support of products where we have a competitive advantage,” she added.
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 is aiming for delivery by the end of the year.
SK Hynix shares initially fell 0.4% as markets opened in South Korea on Thursday, before turning to trade up 1.3%.