SK hynix Reports Record Third-Quarter Sales and Profit on Strong AI Chip Demand

Seoul: SK hynix Inc. announced that its third-quarter sales and profit reached unprecedented levels, driven by a surge in demand for its premium artificial intelligence memory chips. The South Korean company, recognized as the world's second-largest memory chipmaker, reported a net income of 5.75 trillion won (approximately US$4.2 billion), a significant recovery from a loss of 2.18 trillion won in the same quarter the previous year. According to Yonhap News Agency, SK hynix's operating income for the July-September period was 7.02 trillion won, reversing a loss of 1.79 trillion won from a year ago, while sales increased by 93.8 percent year-on-year to 17.57 trillion won. These figures represent record highs for the company, exceeding previous benchmarks set during the semiconductor super boom of 2018. The company's operating profit surpassed average estimates by 3.2 percent, according to a survey conducted by Yonhap Infomax. SK hynix attributed its robust financial performance to heightened demand for AI m emory chips, including high-bandwidth memory (HBM) products and embedded solid state drives (eSSDs). The company reported that sales of HBM chips in the third quarter surged over 70 percent from the previous quarter and 330 percent compared to the same period last year. SK hynix is a leading supplier of HBM products to Nvidia Corp., a major player in the AI semiconductor market. The company has been at the forefront of innovation, being the first in the industry to deliver eight-layer HBM3E chips to Nvidia and commencing mass production of the world's first 12-layer HBM3E product last month. SK hynix plans to enhance profitability by concentrating on high value-added products and is transitioning its production capacity to focus on the advanced HBM3E products. Looking ahead, SK hynix expects HBM sales, which accounted for 30 percent of its total DRAM revenues in the third quarter, to increase to 40 percent in the fourth quarter. The company anticipates that the latest 12-layer HBM3E chips will constitute mo re than half of its total HBM shipments in the first half of the following year. SK hynix also addressed concerns regarding potential declines in AI chip demand, emphasizing that the need for increased computing power and resources will sustain growth. The company plans to expand sales of high-capacity eSSD and optimize production to meet market demand. The company announced plans to increase its annual investment next year, focusing on ongoing developments in new fabrication facilities, including the M15X fab in Cheongju and the Yongin semiconductor cluster, with substantial investments planned to enhance production capacity.