South Korea’s SK Hynix, one of the leading global memory chipmakers, has reported a record quarterly profit for Q3, driven by a surge in demand for its high bandwidth memory (HBM), a crucial component in AI systems. The company’s operating profit reached 7.03 trillion won ($5.08 billion), surpassing market expectations of 6.8 trillion won. This represents a significant turnaround from the 1.8 trillion won loss it posted in the same period last year. Revenue for the quarter increased by 94% year-on-year to 17.57 trillion won ($12.7 billion), boosted by the rising need for advanced AI technologies.
SK Hynix, a major supplier to Nvidia, has benefited from the increasing investments in AI servers, which has driven sales of premium products like HBM and enterprise solid-state drives (eSSD) for data centers. Sales of HBM products soared over 70% from the previous quarter and more than tripled compared to the same period last year. The company attributes this growth to the growing demand for AI memory solutions, especially among data center clients. SK Hynix expects this demand to continue into 2024 as generative AI technology evolves and large tech companies invest heavily in its development.
HBM, a type of dynamic random access memory (DRAM), is designed with vertically stacked chips that save space and reduce power consumption. It is widely used in laptops, workstations, and personal computers. Alongside SK Hynix, Micron Technology and Samsung Electronics dominate the HBM market.
In addition to AI memory, SK Hynix forecasts steady growth in the PC and mobile markets next year as AI-optimized devices gain popularity. The company plans to ramp up production and leverage its competitive edge to meet this growing demand.
Kim Woo-Hyun, SK Hynix’s head of DRAM marketing, commented that the memory industry has emerged from a period of severe downturn, characterized by oversupply and weak market demand, and is now entering a phase of full recovery. To prepare for future demand, the company has begun mass production of its latest HBM chips and expects to make deliveries by the end of the year. Despite an initial dip, SK Hynix shares rose 1.3% by the end of trading on Thursday.
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