SK Hynix Inc, South Korea’s second-biggest memory chipmaker, is expecting a full recovery in memory chips driven by the demand for artificial intelligence (AI) technology. The company reported its highest profit in nearly two years, with an operating profit of 2.89 trillion won ($2.1 billion) for the January-March quarter, a significant turnaround from the previous year’s loss of 3.4 trillion won.
The surge in profit was attributed to the sales of advanced DRAM chips with high bandwidth memory (HBM) for use in generative AI chipsets. SK Hynix stated that the memory market is entering a full recovery cycle, with strong AI demand driving growth. Additionally, demand for chips used in smartphones, personal computers, and servers is expected to improve in the second half of 2024.
The company’s success in the AI market is evident as it has become the main supplier of HBM chips for Nvidia’s graphic processing units used in training AI systems. SK Hynix’s shares have soared 96% in the past year, outperforming its peers, on the back of its lead in HBM chip development.
To maintain its competitive edge, SK Hynix announced a $3.87 billion investment to build an advanced chip packaging plant in Indiana, focusing on HBM chip production and AI product research and development. The company also revealed plans to collaborate with TSMC to develop the next version of HBM chips, called HBM4, and invest 5.3 trillion won in a new DRAM chip factory in South Korea with a focus on HBMs.
The company’s first-quarter revenue rose by 114% year-on-year to 12.4 trillion won, indicating a strong performance in the market. With the AI boom driving demand for memory chips, SK Hynix is poised for further growth and innovation in the semiconductor industry.