SK Hynix Inc. signage at the firm’s workplace in Seongnam, South Korea, on Monday, April 22, 2024. SK Hynix is scheduled to launch earnings figures on April 25. Photographer: SeongJoon Cho/Bloomberg by using Getty Visuals
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South Korean memory chipmaker SK Hynix on Thursday described a internet gain of 1.92 trillion South Korean received ($1.39 billion) in the initially quarter, reversing a loss of 2.58 trillion won logged in the identical interval a yr ago.
This was the 1st beneficial cash flow recorded due to the fact the 3rd quarter of 2022, LSEG data confirmed. SK Hynix posted net losses for five consecutive quarters from a slump in the memory chip sector.
Profits in the initial quarter stood at 12.43 trillion won, a 144% raise from a year back. This was the maximum revenue logged considering the fact that 2nd quarter 2022, according to LSEG details.
SK Hynix attributed the sturdy functionality to an “enhance in the sales of AI server items backed by its leadership in AI memory engineering together with high-bandwidth memory” as properly as initiatives to drive profitability.
SK Hynix is the world’s second-greatest memory chipmaker immediately after Samsung Electronics and supplies significant-bandwidth memory chips catering to AI chipsets for firms like Nvidia.
The explosive desire for AI chipsets boosted the superior-finish memory chip sector, hugely benefiting gamers like SK Hynix and Samsung Electronics.
Massive language styles this kind of as ChatGPT – which caused AI adoption to skyrocket – involve a lot of higher-efficiency memory chips as such chips allow these versions to keep in mind details from earlier discussions and consumer tastes in get to make humanlike responses.
To meet up with AI memory demand from customers, the company reported it strategies to boost supply of HBM3E – the hottest technology of superior-bandwidth memory for AI. SK Hynix said it will also introduce 32GB Double Data Rate 5 goods this year to reinforce its management in the large-capacity server DRAM market.
“We will continue on to function to improving our fiscal results by supplying the industry’s ideal carrying out products at a suitable time and preserving the profitability-initial motivation,” explained Chief Economic Officer Kim Woohyun.
The business jobs the overall memory marketplace to develop steadily in the coming months amid climbing need for AI memory, when the conventional DRAM current market starts off recovering from the 2nd fifty percent of 2024.
Pandemic-induced need for client electronics led providers to stockpile memory chips. But macroeconomic uncertainties these kinds of as inflation brought about buyers to slash back on purchases of these types of client goods, driving down demand from customers and prices for memory chips.
To address the excess inventories, businesses like SK Hynix cut output of its memory chips.
SK Hynix shares slid extra than 4% on Thursday early morning, although in the previous one particular 12 months, they have jumped additional than 100%.
Capturing AI demand
The organization has manufactured modern announcements to meet up with the AI demand from customers.
The business on Wednesday mentioned it options to establish a new fab in South Korea, with an approximated completion day established for November 2025, to boost manufacturing of the upcoming-generation DRAM such as HBM to capture the proliferating demand for AI chips.
Overall financial investment would sum to extra than 20 trillion won in the prolonged phrase, SK Hynix reported.
SK Hynix is also partnering with TSMC, the world’s largest deal chip producer, to build significant-bandwidth memory 4 chips and subsequent-generation packaging engineering. Mass manufacturing of the HBM4 chips is predicted to begin from 2026.
SK Hynix will leverage on TSMC’s primary-edge procedures, in accordance to an April 19 assertion.
