SK Hynix, South Korea’s largest memory chipmaker and a major supplier to Nvidia, reported a record operating profit for the third quarter of 2024 supported by demand for high bandwidth memory used in generative artificial intelligence applications. It posted an operating profit of 7.03 trillion won, or some $5.08 billion, with the company recording a remarkable turnaround from a loss of 1.8 trillion won in the same quarter last year, beating LSEG’s projection of 6.8 trillion won.
SK Hynix revenue for the July-September quarter was 17.57 trillion won or about $12.7 billion, which marked about a year-over-year growth of about 94% from 9.1 trillion won. The jump in profitability also followed an upbeat market trend, as AI servers are proliferating. Sales of premium HBM products were more than 70% sales from the previous quarter and over threefold year-over-year sales for the same period.
SK Hynix said HBM is a form of DRAM whereby the chips are stacked vertically to make them more efficient. Such memory applications are becoming very essential for AI applications. As the large technology firms continue investing in generative AI and other related prospects, the demand for advanced memory solutions will remain persistent.
The company said it remains optimistic on demand AI-related memory, including high-density enterprise solid-state drives, up into 2025, in terms of demand growth, which is expected to continue its growth trend. “Expansion in all areas of AI applications will ensure a stable growth trajectory for the memory market,” Chief Financial Officer of SK Hynix Kim Woohyun said.
SK Hynix is likely to bounce back from an oversupply and geopolitical strain at the beginning of the year. The South Korean memory chip maker began producing its new HBM in mass volumes and will deliver by the end of the year. SK Hynix shares declined 0.4% in the initial market reaction but then rallied to a 1.3% gain.
SK Hynix’s impressive earnings record reflects a sharp turn of events in the memory market as the company takes advantage of the speeding up of the demand for AI-driven technologies.
