The logo of SK hynix in Seongnam, South Korea, Monday, April 22, 2024.
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South Korean memory chip maker SK Hynix reported first-quarter net profit of 1.92 trillion won ($1.39 billion) on Thursday. Reversal of losses It recorded 2.58 trillion won in the same period last year.
This is the first time since the third quarter of 2022 that it has recorded positive revenue, London Stock Exchange data showed. SK Hynix has posted net losses for five consecutive quarters due to the sluggish memory chip market.
Revenue in the first quarter was 12.43 trillion won, an annual increase of 144%. This was the highest revenue since the second quarter of 2022, according to LSEG data.
SK Hynix attributed the strong performance to “growth in sales of AI server products, driven by its leadership in AI memory technology including high-bandwidth memory” and efforts to drive profitability.
SK Hynix is the world’s second-largest memory chip manufacturer after Samsung Electronics, providing high-bandwidth memory chips to companies such as artificial intelligence chipsets. Nvidia.
The explosive demand for AI chipsets has promoted the development of the high-end memory chip market, benefiting companies such as SK Hynix and Samsung Electronics greatly.
Large-scale language models such as ChatGPT, which has led to a surge in artificial intelligence adoption, require large amounts of high-performance storage chips that allow these models to remember details of past conversations and user preferences in order to produce human-like responses.
In order to meet the demand for artificial intelligence memory, the company said it plans to increase the supply of the latest generation of artificial intelligence high-bandwidth memory HBM3E. SK Hynix said it will also launch 32GB double data rate 5 products this year to strengthen its leadership in the large-capacity server DRAM market.
“We will continue to work hard to improve our financial performance by delivering the industry’s best-performing products at the right time and maintaining our commitment to being profitable first,” Chief Financial Officer Kim Woohyun said.
The company expects that as the demand for artificial intelligence memory continues to grow, the overall memory market will grow steadily in the coming months, while the traditional DRAM market will begin to recover in the second half of 2024.
Pandemic-induced demand for consumer electronics has led companies to stockpile memory chips. However, macroeconomic uncertainties such as inflation have led consumers to reduce their purchases of such consumer goods, thus depressing demand and prices for memory chips.
To address excess inventory, companies such as SK Hynix have cut production of memory chips.
Shares of SK Hynix were down more than 4% on Thursday morning, despite gaining more than 100% in the past year.
Capturing Artificial Intelligence Needs
The company has made some recent announcements to address artificial intelligence needs.
The company said on Wednesday Plans to build new wafer fab in South KoreaThe expected completion date is November 2025 to increase production of next-generation DRAM, including HBM, to meet the growing demand for artificial intelligence chips.
SK hynix said that in the long term, the total investment will exceed 20 trillion won.
SK Hynix also cooperates with TSMCThe world’s largest contract chip manufacturer, creating high-bandwidth memory 4 chips and next-generation packaging technology. HBM4 chips are expected to begin mass production in 2026.
According to an April 19 statement, SK Hynix will utilize TSMC’s leading manufacturing processes.
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