South Korean Chip Giant SK Hynix Posts Profit Turnaround
In a remarkable turnaround, South Korean memory chipmaker SK Hynix reported a net profit of .39 billion in the first quarter of 2024, marking a sharp reversal from a .8 billion loss in the same period last year. This positive momentum snapped a streak of five consecutive quarterly losses for the chipmaker, bringing relief to shareholders.
Revenue Soars, Led by AI Demand
The company’s revenue surged by an impressive 144% year-over-year to billion, the highest quarterly revenue since the second quarter of 2022. SK Hynix attributed this strong performance to a surge in sales of AI server products, particularly high-bandwidth memory (HBM) chips, which cater to the rapidly growing AI market.
Leveraging HBM and DRAM
As the second-largest memory chipmaker globally, SK Hynix is harnessing its leadership in AI memory technology to meet the soaring demand for HBM chips. These chips are crucial for powering AI chipsets used by companies like Nvidia in their AI applications.
To capitalize on this growing market, SK Hynix plans to increase production of its latest HBM3E chips and introduce 32GB Double Data Rate 5 (DDR5) products to strengthen its foothold in the high-capacity server DRAM market.
Positive Outlook Amid AI Revolution
SK Hynix is optimistic about the future, projecting steady growth in the memory market due to the increasing demand for AI memory. While the conventional DRAM market is expected to pick up pace in the second half of 2024, the chipmaker believes that its focus on innovation and meeting customer needs will drive continued success.
Investing in the Future
To stay ahead of the curve, SK Hynix has announced plans to invest heavily in its production capacity. The company intends to build a new fab in South Korea, with an estimated completion date in November 2025. This facility will significantly increase production of next-generation DRAM and HBM chips, empowering SK Hynix to capture the booming AI market.
Partnership with TSMC
In a strategic move, SK Hynix is partnering with TSMC, the world leader in contract chip manufacturing, to develop next-generation packaging technology and HBM4 chips. Mass production of HBM4 chips is slated to begin in 2026, giving SK Hynix access to TSMC’s cutting-edge manufacturing capabilities.
Consolidated Growth
Despite the company’s shares experiencing a modest decline of over 4% on Thursday morning, SK Hynix has witnessed a remarkable upward trend in the past year, with a share price jump of over 100%. This growth reflects the market’s confidence in the company’s ability to capitalize on the transformative power of AI.
