SK Hynix Reports Record Q2 Profit, Boosts Investment in AI Chip Production

Nvidia supplier SK Hynix boosts investment plan after record Q2 profit

SEOUL, July 24 (Reuters) - South Korea's SK Hynix (000660.KS), opens new tab posted on Thursday a record quarterly profit, driven by strong demand for advanced chips used in generative artificial intelligence chipsets and as some customers stockpiled semiconductors ahead of potential U.S. tariffs. The Nvidia supplier (NVDA.O), opens new tab said it had lifted its 2025 capital expenditure plan, citing the need to support customers for advanced AI chips next year. SK Hynix did not provide a specific investment target. The company expects to double high-bandwidth memory (HBM) chip sales for the full year compared to 2024, it said. "SK Hynix foresees that increasing competition among big tech companies to enhance inference of AI models would lead to higher demand for high-performance and high-capacity memory products," it said in a statement. SK Hynix overtook Samsung Electronics (005930.KS), opens new tab as the world's top memory chip maker in the first quarter due to its leadership in HBM chips, a crucial component of AI chipsets designed by the likes of Nvidia that assist the processing of vast amounts of data to train AI models. SK Hynix reported a 9.2 trillion won ($6.69 billion) operating profit for the April-June period, up 69% from 5.5 trillion won a year earlier. That compared with a 9.0 trillion won average forecast by LSEG SmartEstimate, which is weighted toward analysts who are more consistently accurate. Revenue rose 35% to 22.2 trillion won during the quarter. After posting a series of record profits boosted by strong AI demand, SK Hynix is bracing for potential U.S. tariffs and rising competition from rivals in supplying advanced chips to Nvidia, analysts say. ($1 = 1,374.5800 won) Reporting by Heekyong Yang and Joyce Lee and Hyunjoo Jin; Editing by Leslie Adler and Jamie Freed Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia supplier SK Hynix Q2 profit rises 69%, slightly above forecasts

SEOUL, July 24 (Reuters) - South Korea's SK Hynix (000660.KS), opens new tab posted on Thursday a record quarterly profit, driven by strong demand for advanced chips used in generative artificial intelligence chipsets and as some customers stockpiled semiconductors ahead of potential U.S. tariffs. The Nvidia (NVDA.O), opens new tab supplier reported a 9.2 trillion won ($6.69 billion) operating profit for the April-June period versus 5.5 trillion won a year earlier. That compared with a 9.0 trillion won average forecast by LSEG SmartEstimate, which is weighted toward analysts who are more consistently accurate. The firm has been a main high-bandwidth memory (HBM) chip supplier to Nvidia, as its cross-town rival Samsung Electronics (005930.KS), opens new tab has struggled to keep up in the race. ($1 = 1,374.5800 won) Reporting by Heekyong Yang and Joyce Lee and Hyunjoo Jin; Editing by Leslie Adler and Jamie Freed Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia supplier SK Hynix plans to boost spending after record Q2 profit

SEOUL, July 24 (Reuters) - SK Hynix (000660.KS), opens new tab flagged plans to boost spending this year after posting on Thursday a record quarterly profit, as the Nvidia (NVDA.O), opens new tab supplier seeks to alleviate investor concerns about slowing growth for artificial intelligence chipsets. The South Korean chipmaker said demand growth would be driven by new model launches by customers and that it was on track to double high-bandwidth memory (HBM) chip sales for the full year compared to 2024. Its shares climbed more than 3% in early trade, compared to the 0.8% rise in the benchmark South Korean KOSPI index (.KS11), opens new tab Hynix did not quantify its new investment plan for 2025. Ryu Young-ho, a senior analyst at NH Investment & Securities, said its proactive response to customer demand for next year appeared to reflect its confidence, as it faces major competition from Samsung Electronics (005930.KS), opens new tab. At an earnings conference, SK Hynix also said it was in talks with a major customer regarding sales next year which are "proceeding as planned". It did not elaborate. In March, SK Hynix said it planned to finalise sales with customers for 2026 within the first half of this year. "SK Hynix foresees that increasing competition among big tech companies to enhance inference of AI models would lead to higher demand for high-performance and high-capacity memory products," it said in a statement. Chaotic U.S. policy and turbulence over tariffs have overshadowed the outlook for many companies, and SK Hynix said its earnings were helped by demand from customers to increase inventory ahead of potential tariffs. Earlier this month, U.S. President Donald Trump threatened to soon introduce tariffs on semiconductors. SK Hynix said in April that the proportion of its exports to the United States was not high, but analysts said the company could face pricing pressure from customers squeezed by U.S. tariffs. A much-anticipated meeting between U.S. and South Korean officials scheduled for Friday to discuss tariffs was cancelled. Hopes for a deal had risen after Japan and the United States reached a deal on tariffs this week. Hynix reported a 9.2 trillion won ($6.69 billion) operating profit for the April-June period, up 69% from 5.5 trillion won a year earlier. That compared with a 9.0 trillion won average forecast by LSEG SmartEstimate, which is weighted toward analysts who are more consistently accurate. Revenue rose 35% to 22.2 trillion won during the quarter. HYNIX VS SAMSUNG Its profit is double the quarterly operating profit expected by crosstown rival Samsung Electronics, which this month projected a worse-than-expected 56% plunge in second-quarter operating profit due to weak AI chip sales. SK Hynix overtook Samsung Electronics as the world's top memory chipmaker in the first quarter due to its leadership in HBM chips, a crucial component of AI chipsets designed by the likes of Nvidia that assist the processing of vast amounts of data to train AI models. After posting a series of record profits boosted by strong AI demand, SK Hynix is bracing for potential U.S. tariffs and rising competition from rivals in supplying advanced chips to Nvidia, analysts say. Last Thursday, SK Hynix saw its shares close about 9% lower after Goldman Sachs downgraded the stock to "neutral", expecting HBM prices would decline for the first time next year. Shares of SK Hynix are up 54.7% so far this year, outperforming the KOSPI's 32.7% rise. ($1 = 1,374.5800 won) Reporting by Heekyong Yang and Joyce Lee and Hyunjoo Jin; Editing by Jamie Freed, Lincoln Feast and Muralikumar Anantharaman Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia supplier SK Hynix to boost spending on AI chips, after record Q2

SEOUL, July 24 (Reuters) - SK Hynix (000660.KS), opens new tab flagged plans to lift spending this year on advanced chipmaking after posting a record quarterly profit on Thursday, boosted by strong demand for artificial intelligence chips and customers stockpiling ahead of potential U.S. tariffs. The South Korean chipmaker, a key supplier to AI giant Nvidia (NVDA.O), opens new tab, said high-end AI chip demand growth would be driven by new model launches by customers and that it was on track to double high-bandwidth memory (HBM) chip sales for the full year. "CAPEX is expected to increase compared to our previous plans, with most of the investment going toward equipment for HBM product," SK Hynix CFO Kim Woo-hyun told an earnings conference call, without quantifying the numbers or giving a geographical breakdown. The company said it sees a need for preemptive investments, having secured visibility on next year's supply through discussions with major customers over HBM demand. SK Hynix's comments not only offer a view on the strength of AI demand and the disruptions caused by U.S. President Donald Trump's tariff policies but also show how the company is fending off rising competition from crosstown rival Samsung Electronics (005930.KS), opens new tab. In January SK Hynix had said capital expenditure (CAPEX) for 2025 would rise slightly from last year's, which it had earlier expected to be more than 10 trillion won ($7.31 billion). SK Hynix also said on Thursday that discussions over HBM supply deals with its key customer, which analysts said referred to Nvidia, are proceeding as planned. In March, SK Hynix said it planned to finalise sales with customers for 2026 within the first half of this year. Its shares were trading up 0.8% as of 0330 GMT, compared with the 0.2% rise in the benchmark South Korean KOSPI index (.KS11), opens new tab TARIFF BOOST Chaotic U.S. policy and turbulence over tariffs have hurt quarterly earnings of many companies, but SK Hynix said on Thursday its results were helped by demand from customers to increase inventory ahead of potential tariffs. Earlier this month, U.S. President Donald Trump threatened to introduce tariffs on semiconductors. SK Hynix said in April that the proportion of its exports to the United States was not high, but analysts said the company could face pricing pressure from customers squeezed by U.S. tariffs. A much-anticipated meeting between U.S. and South Korean officials scheduled for Friday to discuss tariffs was cancelled. Hopes for a deal had risen after Japan and the United States reached a deal on tariffs this week. SK Hynix said U.S. restrictions on China chips will not have an impact on operations at its China production site. The company reported a 9.2 trillion won ($6.69 billion) operating profit for the April-June period, up 69% from 5.5 trillion won a year earlier. That compared with a 9.0 trillion won average forecast by LSEG SmartEstimate, which is weighted toward analysts who are more consistently accurate. Revenue rose 35% to 22.2 trillion won, a quarterly record. SK HYNIX VS SAMSUNG Its profit is double the quarterly operating profit expected by Samsung Electronics, which this month projected a 56% plunge in second-quarter operating profit due to weak AI chip sales. SK Hynix overtook Samsung Electronics as the world's top memory chipmaker in the first quarter due to its leadership in HBM chips, a crucial component of AI chipsets designed by the likes of Nvidia that assist the processing of vast amounts of data to train AI models. After posting a series of record profits boosted by strong AI demand, challenges are brewing for SK Hynix in the form of U.S. tariffs and intensifying competition with rivals. Samsung Electronics, for instance, said it has seen meaningful progress on its latest HBM 3E 12-layer chips by redesigning them. Last Thursday, SK Hynix saw its shares tumble about 9% after Goldman Sachs downgraded the stock to "neutral", expecting HBM prices would decline for the first time next year. Still, shares of SK Hynix are up 54.7% so far this year, outperforming the KOSPI's 32.7% rise. Ryu Young-ho, a senior analyst at NH Investment & Securities, said SK Hynix would have been conservative in its investment plan if it had expected Samsung to aggressively enter the HBM market. "So today's announcement on boosting this year's CAPEX appears to reflect SK Hynix's confidence," he said. ($1 = 1,367.5700 won) Reporting by Heekyong Yang and Joyce Lee and Hyunjoo Jin; Editing by Jamie Freed, Lincoln Feast and Muralikumar Anantharaman Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia supplier SK Hynix second-quarter profit soars 69% to a record high, revenue also hits new highs

The SK Hynix Inc. logo is displayed on a glass door at the company's office in Seoul, South Korea, on Monday, Jan. 27, 2014. SK Hynix aims to select a U.S. site for its advanced chip packaging plant and break ground there around the first quarter of next year. South Korea's SK Hynix on Thursday posted record operating profit and revenue in the second quarter on sustained demand for its high bandwidth memory technology used in generative AI chipsets. Here are SK Hynix's second-quarter results compared with LSEG SmartEstimates, which are weighted toward forecasts from analysts who are more consistently accurate: Revenue rose about 35% in the June quarter compared with the same period a year earlier, while operating profit rose 68%, year on year. On a quarter-on-quarter basis, revenue rose 26%, while operating profit jumped 24%. SK Hynix is a leading supplier of dynamic random access memory -- a type of volatile semiconductor memory commonly found in PCs, workstations and servers that is used to store data and program code. Much of the company's recent success can be credited to its business in high bandwidth memory, or HBM -- a type of DRAM used in artificial intelligence servers. SK Hynix has established itself as the global leader in HBM, supplying clients such as U.S. AI darling Nvidia. Micron Technology and Samsung Electronics are the other memory players seeking to catch up to SK Hynix in the HBM space. However, analysts expect SK Hynix's dominance to persist through this year.

SK hynix posts record profits on surging AI demand

South Korean chip giant SK hynix reported record quarterly profits Thursday thanks to soaring demand for artificial intelligence. The world's second-largest memory chip maker dominates the market for high-bandwidth memory (HBM) semiconductors and is a key supplier for US titan Nvidia. The firm said operating profit climbed almost 70% to 9.21 trillion won ($6.72 billion) in the second quarter, with revenues coming in at 22.23 trillion won -- both all-time peaks. The news comes after Taiwan chip giant TSMC last week announced a surge in net profit for the second quarter, topping forecasts, thanks to robust demand for AI technology, despite the threat of US tariffs on the critical sector. SK hynix also said net profit was up close to 70% on-year, at 6.99 trillion won. "An aggressive investment by global big tech companies into AI led to a steady increase in demand for AI memory," it said in a statement. Shipments of DRAM and NAND flash topped forecasts, boosting the bottom line. "SK hynix foresees that increasing competition among big tech companies to enhance inference of AI models would lead to higher demand for high-performance and high-capacity memory products," the company added. Shares in the firm rose more than 3% in Seoul. South Korea is a major exporter to the United States and its powerhouse semiconductor and auto industries would suffer greatly under President Donald Trump's threatened 25% tariffs. Experts attribute SK hynix's resilience to its growth in the DRAM market. The firm took the lead in DRAM revenues in April, with a 36% market share, according to specialist research firm Counterpoint. That surpassed South Korean rival Samsung for the first time and marked the first change in the top spot in more than four decades. The company also recorded a combined $15.5 billion in sales of DRAM and NAND in the second quarter, matching Samsung to jointly lead the global memory market, according to a Counterpoint report. SK hynix said in a conference call that "the previous quarter began amid concerns over slowing demand due to trade tensions and broader economic uncertainty." But "strong AI-related investment by major tech firms continued to drive growth in demand for AI-oriented memory products." As the United States has been threatening certain restrictions on semiconductor sales to China, customers' preemptive purchases "to hedge against external risks," actually created a "more favorable environment than initially expected," an SK hynix official said. The company added that despite the geopolitical situations, its production situation saw "no change."

SK Hynix to Boost Investment After Record Results on Strong AI Chip Demand -- 2nd Update

SK Hynix, the main supplier of high-bandwidth-memory products for Nvidia, plans to increase spending this year to meet strong demand for artificial-intelligence chips that helped it achieve a record second quarter. The South Korean memory-chip maker said Thursday that aggressive AI investments by global big technology companies led to a steady increase in demand for AI memory chips, including 12-layer HBM3E products. Shipments of both DRAM and NAND flash memory products were higher than expected, it said. "Our total investment for this year is expected to increase compared to the previous plans," an SK Hynix executive said in an earnings call. "Some proactive investment this year is necessary to ensure timely support of our HBM products." Seeking to ease market concerns about a possible slowdown in AI chip demand, he assured investors of the "low likelihood" of any sharp correction, citing new product launches by clients scheduled for the second half of this year. "Our plan to double HBM sales year-over-year remains unchanged," he said, reaffirming SK Hynix's plan to open a new South Korea plant in the final quarter of 2025 to produce DRAM and HBM products from next year. Construction of another South Korea plant is on track for completion in the second quarter of 2027, he said. SK Hynix has said it expects brisk HBM demand to continue through 2025, given the current AI boom, which requires high-performance chips. On Thursday, it posted net profit of 6.996 trillion won, equivalent to $5.09 billion, for the three months ended June, up 70% from a year earlier. That missed the 7.087 trillion won consensus estimate of analysts in a FactSet poll. Revenue rose 35% to a quarterly record of 22.232 trillion won. Operating profit jumped 67% to 9.213 trillion won, also a record and beating bigger rival Samsung Electronics' estimated 4.6 trillion won for the quarter. SK Hynix has had an edge over its rival HBM manufacturers, benefiting from the boom in the premium chip segment. The stock has climbed 55% so far this year, outperforming the local benchmark Kospi's year-to-date gain of 33%. The company plans to mass produce new, cutting-edge HBM4 products in the second half of 2025, potentially widening its lead over Samsung and Micron Technology. SK Hynix pulled ahead of its competitors after it began mass production of 12-layer HBM3E products for Nvidia last year. Some analysts, however, have turned cautious on the South Korean chip maker following its blistering share-price rally. Goldman Sachs last week warned that SK Hynix's earnings growth could lose steam in 2026 on a possible decline in HBM product prices. Goldman downgraded the stock to neutral from buy, citing the likelihood of fiercer competition in the HBM market and less favorable supply-demand conditions from next year. President Trump's erratic trade policies also pose a threat to SK Hynix's outlook. South Korea faces a so-called reciprocal tariff of 25% if the country fails to reach a trade deal with the Trump administration by Aug. 1. Trade officials from both sides are set to resume negotiations in Washington later this week as Seoul seeks to avoid or lower the blanket U.S. tariffs. The U.S. leader has also threatened to impose a separate duty on semiconductors, in addition to levies on autos, steel and aluminum imports. Meanwhile, Trump has decided to allow Nvidia to export its H20 AI chips, which use less advanced HBM products, to China. The move marked a reversal in policy from the Commerce Department, which in April restricted sales of the chip to Chinese customers.

Surging demand for AI memory chips drives SK Hynix's growth

SK Hynix Inc., founded in 1949, headquartered in Icheon, South Korea, is one of the world's leading producers of semiconductor memory and storage solutions. The company specializes in manufacturing dynamic random-access memory (DRAM), NAND flash, and multi-chip packages (MCPs), which integrate multiple memory and controller components to optimize performance and space efficiency for applications ranging from mobile devices and IoT to automotive and computing systems. As a technology leader, the company is at the forefront of the AI memory industry, particularly through its development of high-bandwidth memory (HBM), enterprise SSDs, and advanced NAND architectures, underpinned by robust R&D capabilities and integrated manufacturing facilities in South Korea and China. As of 2024, SK Hynix has approximately 31,800 employees and maintains a global sales footprint, distributing products across the US (63.4% of FY 24 revenue), China (23.5%), other parts of Asia (8.1%), South Korea (2.9%), and Europe (2.1%). SK Hynix reported its Q2 25 results on July 22, 2025, with strong growth in revenue of 35.4% y/y, reaching KRW22.2tn, primarily driven by surging demand for AI memory chips from global technology companies. The company is supplying advanced memory solutions, particularly 12-high HBM3E DRAM and high-performance NAND for AI and data center applications, resulting in higher shipment volumes. EBITDA rose to KRW12.6tn, reflecting a 47.2% y/y growth, with margins expanding from 52.3% to 56.9% in Q2 25. Net income rose to KRW7tn, reflecting a 69.8% y/y increase. The company maintained industry-leading competitiveness in AI memory, which allowed it to command premium pricing and reinforce profitability. SK Hynix announced plans to significantly boost investment after delivering record quarterly results, fueled by surging demand for AI memory chips such as HBM supplied to leading customers like Nvidia. Following the solid results in Q2 25, the company will accelerate capex, focusing on expanding next-generation high-bandwidth memory capacity, including preparations for mass production of advanced HBM4. This proactive investment aims to solidify SK Hynix's leadership in AI-driven semiconductor markets and support long-term growth, as global demand for advanced memory components continues to rise rapidly. SK Hynix's long-term growth has been solid with a consistent rise in top-line and bottom-line performance. Revenue rose at a CAGR of 15.5% over FY 21-24, reaching KRW66.2tn, primarily driven by a surge in demand for high-end memory chips used in AI applications, notably HBM (High Bandwidth Memory) and advanced DRAM. EBITDA surged at a CAGR of 16.5% to KRW35.4tn, with margins expanding from 52% in FY 21 to 53.5%. Net income rose at a CAGR of 27.3% to KRW19.8tn. The cash from operations rose from KRW19.8tn to KRW29.8tn over FY 21-24. Cash and cash equivalent also strengthened over the same period, reaching KRW11.2tn at end-FY 24 from KRW5.1tn at end-FY 21, supported by an increase in cash inflow from operations. In addition, ROE also rose from 16.9% to 31.1% in FY 24. In comparison, Micron Technology, Inc., a global peer, posted a revenue CAGR of minus 3.2% over the past three years, reducing to $25.1bn in FY 24. EBITDA declined at a CAGR of minus 11.6% to $8.9bn, with margins contracting from 47% in FY 21 to 35.6% in FY 24. Net income also dropped at a CAGR of 49% to $778m. Over the past 12 months, the company's stock has delivered robust returns of 34.2%. In comparison, Micron Technology has underperformed, posting returns of 3.8% over the same period. SK Hynix is currently trading at a P/E of 6x, based on the FY 25 estimated EPS of KRW43,723, which is trading at the level of its 3-year historical average of 6.2x. However, it is trading lower than Micron Technology's valuation of 15.6x. Likewise, the company is currently trading at an EV/EBITDA multiple of 3.4x, based on the FY 25 estimated EBITDA of KRW52.3tn, which is lower than its 3-year historical average of 9x and Micron Technology (7.2x). SK Hynix is monitored by 36 analysts, with 29 having 'Buy' ratings and seven having 'Hold' ratings for an average target price of KRW329,255, implying 25.4% upside potential from the current price. The analysts' views are backed by an anticipated EBITDA CAGR of 22.9% over FY 24-27, reaching KRW66.8tn, with margins expanding by 300bp to 57.4% in FY 27. In addition, analysts estimate a net profit CAGR of 24.7%, reaching KRW38.4tn, with a margin of 33%, with EPS expected to increase to KRW54,437 in FY 27 from KRW28,322 in FY 24. Likewise, analysts estimate an EBITDA CAGR of 44.8% and a net profit CAGR of 163.7% for Micron Technology. Overall, SK Hynix's impressive Q2 25 performance underscores its strong position in the semiconductor memory market, driven by surging demand for AI memory chips. Strategic investments in next-generation high-bandwidth memory and robust financial growth highlight the company's commitment to maintaining industry leadership. With a solid global footprint and positive analyst outlook, SK Hynix is well-positioned for continued success and long-term growth in the rapidly evolving AI-driven semiconductor landscape. However, the company faces technology migration delays and supply chain disruptions. Competitive pressures in the HBM market, customer concentration risks, and sensitivity to AI cycles further amplify uncertainties, potentially impacting capacity, revenue, and long-term growth.