A man walks past a logo of SK Hynix in the lobby of the company’s Bundang office in Seongnam, January 29, 2021.
Jung Yeon-Je | AFP | Getty Images
South Korea SK Hynixone of the world’s largest memory chip makers, reported record quarterly revenue and profit on Wednesday, driven by strong demand for its high-bandwidth memory used in generative AI chipsets.
Here are SK Hynix’s third-quarter results compared to LSEG’s SmartEstimates, which are weighted based on more precise analyst forecasts:
- Income: 24.45 trillion won ($17.13 billion) vs. 24.73 trillion won
- Operating result: 11.38 trillion won versus 11.39 trillion won
Revenue rose about 39% in the September quarter compared to the same period a year earlier, while operating profit jumped 62% year-on-year.
On a quarterly basis, revenue increased by 10%, while operating profit increased by 24%.
SK Hynix makes memory chips used to store data and found in everything from servers to consumer devices such as smartphones and laptops.
The company has benefited from the rise of artificial intelligence as a key supplier of high-bandwidth memory or HBM chips used to power AI data center servers.
“As demand in the memory segment soared due to increasing customer investments in AI infrastructure, SK Hynix once again surpassed the previous quarter’s record performance thanks to increased sales of high-value products.,” SK Hynix said in its earnings release.
HBM falls into the broader category of dynamic random access memory, or DRAM, a type of solid-state memory used to store data and program code that can be found in PCs, workstations, and servers.
SK Hynix stood out in the DRAM market by quickly taking the lead in the HBM market and establishing itself as the main supplier to the world’s leading AI chip designer, Nvidia.
However, its main competitors, based in the United States Micron and the South Korean tech giant Samsunghave been working to catch up in space.
“With the innovation of AI technology, the memory market has shifted to a new paradigm and demand has begun to expand to all product areas,” Kim Woohyun, chief financial officer of SK Hynix, said in the earnings release.
“We will continue to strengthen our leadership in AI memory by meeting customer demand with market-leading products and differentiated technology capabilities,” he added.
The HBM market is expected to continue to explode over the next few years to reach around $43 billion by 2027, giving strong leverage to memory makers such as SK Hynix, MS Hwang, research director at Counterpoint Research, told CNBC.
“[F]or SK Hynix to continue generating profits, it will be important for the company to maintain and improve its competitive advantage,” he added.
