Nvidia supplier SK Hynix posts record quarterly profit on AI chip demand

By Joyce Lee and Hyunjoo Jin

SEOUL (Reuters) -South Korea’s SK Hynix on Thursday posted a record quarterly profit as the Nvidia (NASDAQ:NVDA) supplier saw strong sales of advanced chips such as high-bandwidth memory (HBM) used in generative artificial intelligence chipsets.

“Demand of HBM and high-density server DRAM… will continue to increase as global big tech companies’ investment in AI servers grows and AI inference technology gains importance,” SK Hynix said in a statement.

The world’s second-biggest memory chipmaker reported an 8.1 trillion won ($5.64 billion) operating profit for the October-December quarter, up from a 346 billion won profit a year earlier.

The result compared with an 8 trillion won average forecast by LSEG SmartEstimate, which is weighted toward analysts who are more consistently accurate.

SK Hynix’s quarterly operating profit exceeded its bigger rival Samsung Electronics (KS:005930)’ forecast December-quarter operating profit of 6.5 trillion won. Samsung’s earnings encompass its chips, mobile, TV and home appliance businesses, while SK Hynix solely focuses on memory chips.

SK Hynix has been increasingly outperforming rivals Samsung and U.S.-based Micron Technology (NASDAQ:MU) in recent quarters, as it benefits the most from AI-driven appetite for high-end memory chips following its early entry and large investments in HBM chip development.

SK Hynix shares have jumped about 30% so far this year on bullish sentiment driven by its business discussions with Nvidia, outperforming Samsung, whose shares rose 2% over the same period.

SK Hynix’s shares benefited on Tuesday from U.S. President Donald Trump’s announcement of private-sector investment of up to $500 billion to fund infrastructure for AI.

For the conventional memory chip market, customers are expected to reduce inventory of PCs and smartphones, SK Hynix said. “Sales of PCs and smartphones equipped with AI will expand and the market situation will pick up in the second half of the year,” it added.

SK Hynix said its revenue for the quarter rose 75% year-on-year to 19.8 trillion won.

($1 = 1,435.1200 won)