SK Hynix Inc. signage on 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 way of Getty Photographs
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South Korean reminiscence chipmaker SK Hynix on Thursday reported a web revenue of 1.92 trillion South Korean gained ($1.39 billion) within the first quarter, reversing a lack of 2.58 trillion gained logged in the identical interval a yr in the past.
This was the primary constructive revenue recorded for the reason that third quarter of 2022, LSEG knowledge confirmed. SK Hynix posted web losses for 5 consecutive quarters from a droop within the reminiscence chip market.
Income within the first quarter stood at 12.43 trillion gained, a 144% enhance from a yr in the past. This was the very best income logged since second quarter 2022, in keeping with LSEG knowledge.
SK Hynix attributed the robust efficiency to an “enhance within the gross sales of AI server merchandise backed by its management in AI reminiscence expertise together with high-bandwidth reminiscence” in addition to efforts to drive profitability.
SK Hynix is the world’s second-largest reminiscence chipmaker after Samsung Electronics and provides high-bandwidth reminiscence chips catering to AI chipsets for corporations like Nvidia.
The explosive demand for AI chipsets boosted the high-end reminiscence chip market, vastly benefiting gamers like SK Hynix and Samsung Electronics.
Giant language fashions akin to ChatGPT – which prompted AI adoption to skyrocket – require quite a lot of high-performance reminiscence chips as such chips enable these fashions to recollect particulars from previous conversations and person preferences so as to generate humanlike responses.
To satisfy AI reminiscence demand, the agency stated it plans to extend provide of HBM3E – the newest era of high-bandwidth reminiscence for AI. SK Hynix stated it’ll additionally introduce 32GB Double Knowledge Price 5 merchandise this yr to strengthen its management within the high-capacity server DRAM market.
“We are going to proceed to work in direction of enhancing our monetary outcomes by offering the trade’s greatest performing merchandise at a proper time and sustaining the profitability-first dedication,” stated Chief Monetary Officer Kim Woohyun.
The agency tasks the general reminiscence market to develop steadily within the coming months amid rising demand for AI reminiscence, whereas the standard DRAM market begins recovering from the second half of 2024.
Pandemic-induced demand for client electronics led corporations to stockpile reminiscence chips. However macroeconomic uncertainties akin to inflation prompted customers to chop again on purchases of such client items, driving down demand and costs for reminiscence chips.
To deal with the surplus inventories, corporations like SK Hynix reduce manufacturing of its reminiscence chips.
SK Hynix shares slid greater than 4% on Thursday morning, although within the final one yr, they’ve jumped greater than 100%.
Capturing AI demand
The agency has made current bulletins to satisfy the AI demand.
The agency on Wednesday stated it plans to construct a brand new fab in South Korea, with an estimated completion date set for November 2025, to extend manufacturing of the next-generation DRAM together with HBM to seize the proliferating demand for AI chips.
Whole funding would quantity to greater than 20 trillion gained in the long run, SK Hynix stated.
SK Hynix can also be partnering with TSMC, the world’s largest contract chip producer, to construct high-bandwidth reminiscence 4 chips and next-generation packaging expertise. Mass manufacturing of the HBM4 chips is anticipated to start out from 2026.
SK Hynix will leverage on TSMC’s modern processes, in keeping with an April 19 assertion.