SK Hynix, the world’s second-largest memory chipmaker, reported its highest quarterly profit in six years as sales of high-end chips used in artificial intelligence (AI) applications surged in the second quarter.
SK Hynix posted an operating profit of 5.46 trillion won ($3.95 billion) in the three months to June, rebounding from a loss of 2.88 trillion won a year ago, the company said in a regulatory filing on July 25. The last time the South Korean chipmaker’s operating profit reached the 5 trillion won mark was during the semiconductor supercycle in the second and third quarters of 2018.
The company’s second-quarter revenue surged 124.8% year-on-year to 16.42 trillion won, far exceeding market expectations of 5.2 trillion won and surpassing the previous quarterly revenue record of 13.8 trillion won set in the second quarter of 2022.
“Strong demand for AI memory products such as high-bandwidth memory (HBM) and embedded solid state drives (eSSD), coupled with a continuous rise in the prices of DRAM and NAND products, led to a 32% increase in revenue compared to the first quarter,” SK Hynix said in a statement. “Increased sales of premium products and favorable exchange rate effects boosted operating margins by 10 percentage points from the previous quarter to 33%, aligning with market expectations.”
The chipmaker’s DRAM sales, including high-end DRAM chips such as HBM, expanded in the second quarter, fueled by surging AI demand. HBM sales were the key driver of the company’s better-than-expected performance, rising by over 80% quarter-on-quarter and over 250% year-on-year. SK Hynix leads the HBM market as the main supplier of HBM chips to U.S. tech giant Nvidia. HBM chips are crucial components of Nvidia’s graphics processing units (GPUs), which power generative AI systems such as OpenAI’s ChatGPT.
For the NAND business, the company said sales of eSSDs and mobile products rose significantly, with eSSD sales increasing by approximately 50% from the first quarter. “The average selling price (ASP) growth across NAND products has risen over two consecutive quarters since the fourth quarter of last year,” said SK Hynix.
“We plan to maintain leadership in the HBM market by mass-producing 12-layer HBM3E products in the third quarter,” the company said.
