Nvidia supplier SK Hynix reports record profits on AI boom, but shares slip amid demand concerns

SK Hynix, one of the world’s top memory chipmakers, announced record quarterly earnings driven by strong sales of high-bandwidth memory (HBM) used in generative AI chipsets.

The company reported revenue of 19.77 trillion won (US$13.7 billion), slightly below the expected 19.91 trillion won, while operating profit reached 8.08 trillion won (US$5.6 billion), surpassing forecasts of 8.02 trillion won. 

Revenue surged 75% year-on-year in the October-December quarter, with operating profit soaring 2,236% during the same period. On a quarter-on-quarter basis, revenue increased by 12%, and operating profit rose 15%, setting a new record.

However, its shares dropped 2.7% after Chief Financial Officer Kim Woohyun flagged uncertainties around memory demand in 2025, citing inventory adjustments by PC and smartphone manufacturers, protective trade policies, and geopolitical risks.

SK Hynix attributes its record-breaking performance to strong demand for AI memory, highlighting its leadership in HBM technology. HBM, a type of dynamic random-access memory (DRAM) that vertically stacks chips for greater efficiency, is critical for AI servers. The company is a key supplier to US AI chip designer Nvidia, competing with Micron Technology and Samsung Electronics in this space.

While demand for AI memory remains robust, SK Hynix acknowledged potential challenges ahead. The company expects continued growth in HBM and DRAM sales as large tech firms invest in AI servers and training AI models gains traction. It also projects expansion in the consumer market for AI-equipped PCs and smartphones, especially in the second half of the year. The memory industry is transitioning from a commodity-driven market to one focused on high-performance, customized products, with DRAM demand expected to grow by a mid-to-high teen percentage and NAND demand by a low teen percentage in 2025.

Despite a 29% gain in SK Hynix shares this year, some investors remain cautious about a potential market adjustment period. Speaking to CNBC, Daiwa Capital Markets analyst SK Kim described the company’s Q4 results as “robust” and reaffirmed its leadership in the HBM segment. 

SK Hynix’s 2024 performance set a new benchmark, surpassing its 2022 revenue record by over 21 trillion won, and positioning the company to maintain its technological edge amid evolving global market dynamics.

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