SK Hynix Inc. signage on the firm’s workplace in Seongnam, South Korea, on Monday, April 22, 2024. SK Hynix is scheduled to launch earnings figures on April 25. Photographer: SeongJoon Cho/Bloomberg by way of Getty Pictures
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South Korean reminiscence chipmaker SK Hynix on Thursday reported a internet revenue of 1.92 trillion South Korean received ($1.39 billion) within the first quarter, reversing a lack of 2.58 trillion received logged in the identical interval a 12 months in the past.
This was the primary constructive revenue recorded because the third quarter of 2022, LSEG knowledge confirmed. SK Hynix posted internet losses for 5 consecutive quarters from a droop within the reminiscence chip market.
Income within the first quarter stood at 12.43 trillion received, a 144% improve from a 12 months in the past. This was the best income logged since second quarter 2022, in accordance with LSEG knowledge.
SK Hynix attributed the sturdy efficiency to an “improve within the gross sales of AI server merchandise backed by its management in AI reminiscence expertise together with high-bandwidth reminiscence” in addition to efforts to drive profitability.
SK Hynix is the world’s second-largest reminiscence chipmaker after Samsung Electronics and provides high-bandwidth reminiscence chips catering to AI chipsets for corporations like Nvidia.
The explosive demand for AI chipsets boosted the high-end reminiscence chip market, vastly benefiting gamers like SK Hynix and Samsung Electronics.
Giant language fashions corresponding to ChatGPT – which prompted AI adoption to skyrocket – require lots of high-performance reminiscence chips as such chips enable these fashions to recollect particulars from previous conversations and person preferences in an effort to generate humanlike responses.
To fulfill AI reminiscence demand, the agency stated it plans to extend provide of HBM3E – the newest technology of high-bandwidth reminiscence for AI. SK Hynix stated it’s going to additionally introduce 32GB Double Knowledge Charge 5 merchandise this 12 months to strengthen its management within the high-capacity server DRAM market.
“We’ll proceed to work in direction of enhancing our monetary outcomes by offering the trade’s greatest performing merchandise at a proper time and sustaining the profitability-first dedication,” stated Chief Monetary Officer Kim Woohyun.
The agency tasks the general reminiscence market to develop steadily within the coming months amid rising demand for AI reminiscence, whereas the standard DRAM market begins recovering from the second half of 2024.
Pandemic-induced demand for client electronics led corporations to stockpile reminiscence chips. However macroeconomic uncertainties corresponding to inflation prompted customers to chop again on purchases of such client items, driving down demand and costs for reminiscence chips.
To deal with the surplus inventories, corporations like SK Hynix lower manufacturing of its reminiscence chips.
SK Hynix shares slid greater than 4% on Thursday morning, although within the final one 12 months, they’ve jumped greater than 100%.
Capturing AI demand
The agency has made current bulletins to satisfy the AI demand.
The agency on Wednesday stated it plans to construct a brand new fab in South Korea, with an estimated completion date set for November 2025, to extend manufacturing of the next-generation DRAM together with HBM to seize the proliferating demand for AI chips.
Whole funding would quantity to greater than 20 trillion received in the long run, SK Hynix stated.
SK Hynix can be partnering with TSMC, the world’s largest contract chip producer, to construct high-bandwidth reminiscence 4 chips and next-generation packaging expertise. Mass manufacturing of the HBM4 chips is predicted to begin from 2026.
SK Hynix will leverage on TSMC’s modern processes, in accordance with an April 19 assertion.
