SK Hynix posts record $25.4 billion profit as AI boom drives memory chip prices to new heights
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SK Hynix Beats Estimates on AI Chip Sales, Soaring Memory Prices
Favorable memory prices are expected to continue, with SK Hynix increasing its capital spending significantly this year to expand production capacity. SK Hynix Inc. reported a five-fold jump in quarterly profit, underscoring the surging prices of the memory chips that underpin the boom in global
[2]
Nvidia supplier SK Hynix hails 'structural shift' after another record quarter
SK Hynix posted another record quarter with a fivefold jump in earnings as the world's second-largest memory chipmaker stressed a "structural shift" in the sector with booming AI demand continuing to strain chip supply. The South Korean company said on Thursday that operating profit rose to
[3]
Nvidia supplier SK Hynix's Q1 profit rises five-fold to a record high on AI boom
SEOUL, April 23 (Reuters) - South Korea's SK Hynix (000660.KS), opens new tab posted a more than five-fold jump in first-quarter operating profit to a record high on Thursday, as the artificial intelligence boom drove strong demand for both advanced and conventional memory chip products. The
[4]
SK Hynix posts record first-quarter profit, in line with estimates as memory prices climb
A SK Hynix flag (R) and a South Korean national flag (L) flutter outside the company's Bundang office in Seongnam on Jan. 26, 2024. South Korean memory chip giant SK Hynix posted yet another quarter of record profit and revenue on Thursday, as prices for its products continue to surge amid strong
[5]
Chip giant SK hynix posts record quarterly profit on AI boom
Seoul (AFP) - Chip giant SK hynix logged a record quarterly net profit on Thursday thanks to the artificial intelligence boom, shrugging off concerns that the Middle East war could drag on the semiconductor industry. Huge investments from governments and major technology companies are driving
[6]
Nvidia-Supplier SK Hynix Smashes Records with $35 Billion Quarter As AI Demand Defies Seasonality
On Thursday, SK Hynix reported blowout first-quarter results, saying demand tied to artificial intelligence helped push quarterly revenue past KRW 50 trillion ($33.7 billion) for the first time. The memory maker also laid out plans for new DRAM and NAND products to dominate the memory market. SK
[7]
SK hynix's Q1 operating margin breaks above 70%, higher than Nvidia, TSMC - The Korea Times
SK hynix on Thursday posted an operating profit of 37.61 trillion won ($25.42 billion) for the first quarter, nearly doubling its previous record set just three months earlier. This helped the chipmaker's operating margin surpass 70 percent, far outpacing those of TSMC and Nvidia. In its
[8]
SK hynix Q1 operating margin breaks above 70%, higher than Nvidia, TSMC - The Korea Times
SK hynix on Thursday posted an operating profit of 37.61 trillion won ($25.42 billion) for the first quarter, nearly doubling the previous record set just three months earlier. This helped the chipmaker's operating margin to surpass 70 percent, far outpacing that of TSMC and Nvidia. In its
[9]
SK Hynix Q1 profit surges over 400%, beats expectations on stellar AI demand By Investing.com
Investing.com-- SK Hynix Inc (KS:000660) clocked an over five-fold increase in its first-quarter operating profit on Thursday, beating market expectations as the South Korean memory chip maker benefited greatly from increasing artificial intelligence demand. SK Hynix's operating profit jumped 405%
[10]
SK Hynix Earnings Top Estimates as AI Boom Lifts Memory Prices -- Update
Nvidia supplier SK Hynix reported a fivefold jump in quarterly net profit on surging demand for advanced memory chips, indicating that the global artificial-intelligence buildout remains intact despite risks posed by the Middle East conflict. The world's second-largest memory chip maker, a key
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SK Hynix reported a five-fold jump in quarterly profit to a record $25.4 billion, driven by soaring memory prices and surging demand for high-bandwidth memory chips used in AI data centers. The Nvidia supplier plans significant capital spending increases to expand production capacity, while executives highlight a structural shift in the memory sector that could extend the upcycle through 2028.
SK Hynix Achieves Record Quarterly Profit Amid AI Boom
SK Hynix delivered a stunning performance in the first quarter, posting operating profit of 37.6 trillion won ($25.4 billion), a five-fold increase from the previous year and a record high that exceeded analyst estimates of 35.7 trillion won
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. Revenue nearly tripled to 52.6 trillion won, surpassing 50 trillion won for the first time on a quarterly basis4
. The South Korean memory chips manufacturer is riding an unprecedented wave of demand as Big Tech companies pour hundreds of billions of dollars into AI infrastructure, fundamentally reshaping the semiconductor industry.
Source: Korea Times
The Nvidia supplier has capitalized on its dominant position in high-bandwidth memory (HBM), capturing a 57 percent market share as of the end of last year, ahead of rivals Samsung and Micron Technology
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. This lead has proven critical as hyperscalers from Meta Platforms to Amazon accelerate their AI hardware investments, creating insatiable demand for the advanced memory chips essential for training and running AI models alongside Nvidia accelerators1
.
Source: Bloomberg
Soaring Memory Prices Signal Structural Shift in Sector
The memory chip market is experiencing what executives describe as a structural shift rather than a typical cyclical upturn. Joon Deok Park, head of DRAM marketing at SK Hynix, emphasized that "the current cycle seems different from the past as memory price upswings are driven by structural changes rather than temporary demand and supply"
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. This transformation is reflected in dramatic price increases across the board. Contract prices for certain DRAM chips jumped nearly 83 percent in the first quarter from the previous quarter, while prices for some NAND products soared around 160 percent, according to TrendForce3
.The benchmark contract price for 8 gigabits of DDR4 PC memory has risen for 11 consecutive months, hitting roughly $13 last month
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. The average selling price of DRAM climbed 60.8 percent in the first quarter from the previous quarter, while NAND rose 55.3 percent, according to Mirae Asset Securities estimates1
. SK Hynix expects this favorable pricing environment to continue "for the time being," as customers prioritize procurement over pricing amid supply constraints2
.Production Capacity Expansion and Capital Spending Surge
Responding to sustained demand, SK Hynix announced that capital spending will increase significantly this year from 30.2 trillion won in 2025
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. In March, the company committed to purchasing 11.95 trillion won (approximately $8 billion) worth of EUV lithography tools from ASML by 20273
. The company is accelerating capacity expansion, including bringing forward the opening of a new memory chip plant and building infrastructure at the Yongin Cluster while ramping up the M15X fab3
. Additionally, SK Hynix plans to spend 19 trillion won to build a new factory in South Korea's Cheongju5
.Samsung, SK Hynix's larger rival, is similarly mobilizing resources, planning to spend more than 110 trillion won on chip capacity expansion and research this year in an effort to seize the lead in AI semiconductors
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. This massive investment wave across the semiconductor industry underscores the intensity of competition and the scale of anticipated demand from AI data centers.Chip Wafer Shortage Expected to Persist Through 2030
SK Group Chairman Chey Tae-won has warned that the global chip wafer shortage is likely to persist until 2030, as demand driven by the AI boom continues to outpace supply
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. He stated in March that building additional wafer supply could take at least four to five years, with a projected shortfall exceeding 20 percent4
. This extended timeline for capacity additions means supply constraints will continue to support pricing power for memory makers well into the future.SK Hynix noted that customer demand for high-bandwidth chips used in AI processors over the next three years far exceeded its production capacity
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. The company emphasized that as AI evolves from large model training to agentic AI, which repeatedly performs real-time inference across various service environments, the foundation for memory demand is expanding across both DRAM and NAND flash3
.Related Stories
AI Servers and Inference Workloads Drive Sustained Demand
Demand for AI server chips remains strong, increasingly driven by inference workloads where applications such as chatbots generate responses
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. SK Hynix dismissed concerns that memory-efficiency technologies such as Google's TurboQuant might reduce chip demand, arguing instead that they would expand memory demand by enhancing the economic viability of AI services. "The advancement of the memory optimisation technology will actually serve as a catalyst for driving memory demand further by expanding the AI ecosystem," Park explained2
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Source: Reuters
Along with Samsung Electronics, SK Hynix is supplying HBM to Nvidia for its forthcoming "Vera Rubin" AI platform, expected to further boost AI capabilities
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. Reports suggest that memory chip suppliers are entering into long-term supply agreements of three years or more with Big Tech companies, with some customers seeking options to extend contract durations beyond the initial term, underscoring their emphasis on supply stability5
.Market Implications and Future Outlook
SK Hynix shares have surged approximately 90 percent this year after more than tripling in 2025, with the company's market value climbing to around $590 billion, surpassing chip equipment maker ASML's $570 billion
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. Over the past 12 months, shares have skyrocketed by around 600 percent, helping push Seoul's benchmark Kospi stock index to record highs5
.Kwon Seok-joon, a professor at Sungkyunkwan University in Seoul, noted the clear structural change in the market: "Where the market was once driven by cyclical commodity chips, demand for AI-specialised memory chips is getting bigger now, extending the upcycle. Based on current long-term contracts, it could last through next year and possibly to 2028"
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. However, some analysts remain cautious about cyclicality returning. Jorry Noeddekaer of Polar Capital stated, "We are, in a way, in a new paradigm for memory, but this idea that you will never ever see cyclicality in memory -- we are not buying that"1
.Chairman Chey Tae-won cautioned in February that losses remain a possibility in the future in an era of rapid technological shifts, highlighting mounting infrastructure challenges. He said SK Group is exploring building power plants alongside AI data centers, as failure to meet energy demand could be "disastrous"
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. The company also noted that geopolitical risks from the Middle East conflict would have limited short-to-long-term impact on material supply, citing sufficient inventories and diversified sourcing2
.References
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