SK Hynix exceeds forecasts with a record quarterly profit due to the enormous demand for AI

SK Hynix Posts Record Quarterly Profit on Surging AI-Driven Memory Demand

South Korea’s SK Hynix said on Wednesday that its quarterly operating profit more than doubled to a record high, comfortably beating market expectations as relentless demand linked to artificial intelligence lifted prices for both advanced and conventional memory chips.

The Nvidia supplier reported a 137% surge in operating profit to 19.2 trillion won ($13.5 billion) for the fourth quarter, according to Reuters calculations. That compares with 8.1 trillion won a year earlier and a consensus forecast of 17.7 trillion won from LSEG SmartEstimate, which is weighted toward analysts with more consistent forecasting records.

SK Hynix is scheduled to hold a briefing on its fourth-quarter earnings on Thursday.

The company has built a dominant position in high bandwidth memory (HBM), a critical component in AI chipsets designed by companies such as Nvidia. SK Hynix commands about 61% of the global HBM market, according to Macquarie Equity Research.

It is also benefiting from tight supply conditions and rising AI-related demand that are driving up prices for commodity memory products, including DRAM and NAND chips used in servers, personal computers and mobile devices.

Contract prices for 16-gigabyte DDR5 DRAM, a widely used memory chip, more than quadrupled in the fourth quarter from a year earlier, according to market tracker TrendForce. The firm expects conventional DRAM contract prices to rise a further 55% to 60% in the current quarter compared with the previous one.