On Wednesday, South Korea’s SK Hynix reported unprecedented quarterly revenue and profit, driven by skyrocketing memory prices and high demand from generative AI chipsets, as it competes with Samsung for dominance as the leading memory manufacturer worldwide.
Here are the company’s figures compared to LSEG SmartEstimates, which lean towards projections from analysts known for their accuracy:
- Revenue: 32.827 trillion won ($23 billion) vs. 32.132 trillion won anticipated
- Operating profit: 19.17 trillion won vs. 17.729 trillion won projected
The revenue increased by approximately 66% in the December quarter in comparison to the same timeframe last year, while operating profit soared by 137% over the same duration.
SK Hynix manufactures memory chips necessary for data storage, which are utilized in a range of devices from servers to consumer gadgets like smartphones and laptops.
The company has gained from an AI surge as a significant supplier of high-bandwidth memory, or HBM chips, which are essential for driving AI data center servers.
HBM fits into the wider classification of dynamic random access memory, or DRAM — a variety of semiconductor memory utilized for data storage and program code that appears in PCs, workstations, and servers.
“HBM revenue more than doubled year-over-year, playing a crucial role in the company’s exceptional performance [last year],” it noted in its earnings disclosure.
The appetite for HBM has significantly surpassed what memory producers have been capable of delivering, with effects on manufacturers’ capabilities also causing shortages for less advanced memory chips found in consumer electronics and electric vehicles.
As a consequence of this situation, memory prices have been climbing, with shortages anticipated to persist into the following year as companies like SK Hynix await additional capacity expansions to materialize.
Additionally, SK Hynix revealed on Wednesday intentions to cancel treasury shares amounting to 12.24 trillion won, a strategy designed to enhance shareholder value. This announcement came after a boost in the memory maker’s stock price on Tuesday following local media reported that it had secured exclusivity as the supplier of advanced memory chips for a new AI processor crafted by Microsoft.
SK Hynix is scheduled to hold an earnings call with investors on Thursday. Samsung, SK Hynix’s top competitor in the memory market, including HBM, is also poised to release earnings today.
