SK Hynix, a South Korean memory chipmaker, reported a net profit of 1.92 trillion South Korean won ($1.39 billion) in the first quarter, a significant turnaround from the loss of 2.58 trillion won in the same period a year ago. This positive income marks the first quarter of profitability since the third quarter of 2022. The company had faced challenges in the memory chip market, leading to net losses for five consecutive quarters prior to this turnaround.
Revenue for SK Hynix in the first quarter reached 12.43 trillion won, reflecting a remarkable 144% increase from the previous year. This surge in revenue is the highest recorded since the second quarter of 2022. The company attributed this strong performance to an increase in sales of AI server products, supported by leadership in AI memory technology, particularly high-bandwidth memory. Additionally, efforts to drive profitability contributed to the positive financial results for SK Hynix.
The demand for AI chipsets, fueled by the adoption of large language models like ChatGPT, has significantly boosted the high-end memory chip market. SK Hynix, as a key player in this space, has been supplying high-bandwidth memory chips for AI chipsets, particularly for companies like Nvidia. To meet the growing demand for AI memory, the company plans to increase the supply of HBM3E, the latest generation of high-bandwidth memory. Additionally, SK Hynix will introduce 32GB Double Data Rate 5 products to strengthen its position in the high-capacity server DRAM market.
Looking ahead, SK Hynix projects steady growth in the overall memory market in the coming months, driven by the increasing demand for AI memory. The company anticipates a recovery in the conventional DRAM market from the second half of 2024. Despite pandemic-induced demand for consumer electronics that led to stockpiling of memory chips, macroeconomic uncertainties like inflation have impacted consumer purchasing behavior, resulting in a decline in demand and prices for memory chips.
To address the evolving market dynamics and capitalize on the growing demand for AI chips, SK Hynix has announced strategic initiatives. The company plans to build a new fab in South Korea, scheduled for completion by November 2025, to ramp up production of the next-generation DRAM, including HBM, to meet the increasing demand for AI chips. The total investment for this project is expected to exceed 20 trillion won in the long term. Additionally, SK Hynix has partnered with TSMC, the world’s largest contract chip manufacturer, for the development of high-bandwidth memory 4 chips and next-generation packaging technology. Mass production of the HBM4 chips is slated to commence in 2026, leveraging TSMC’s advanced processes.
SK Hynix’s strong performance in the first quarter of 2025 underscores its resilience and strategic positioning in the memory chip market, particularly in the high-demand segment for AI memory chips. Through investments in advanced technologies, strategic partnerships, and a commitment to innovation, the company is well-positioned to capture opportunities in the evolving landscape of the semiconductor industry.
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