South Korean memory chipmaker SK Hynix reported a record quarterly profit of 7.03 trillion won ($5.08 billion) for the third quarter of 2023, driven by a surge in demand for high-bandwidth memory (HBM) used in artificial intelligence (AI) servers, CNBC reports.
This result exceeded analysts’ expectations of 6.8 trillion won and marked a significant rebound from the 1.8 trillion won loss the company experienced during the same period last year.
Revenue for the quarter reached 17.57 trillion won ($12.7 billion), reflecting a 94% year-on-year increase. SK Hynix, one of the world’s largest memory chipmakers and a key supplier to Nvidia, has benefited from growing demand for AI-driven data centers. The company noted in its earnings report that AI memory demand remained strong, particularly from data center customers, which allowed it to increase sales of premium products like HBM.
HBM, a type of dynamic random access memory (DRAM), is widely used in laptops, workstations, and PCs due to its ability to save space and reduce power consumption. SK Hynix, along with Micron Technology and Samsung Electronics, is one of the main manufacturers of HBM chips. The company’s HBM sales increased more than 70% from the previous quarter and more than tripled compared to the same period last year, with continued growth expected.
SK Hynix projects that the trend of rising AI memory demand will persist into next year as generative AI technology continues to develop, with large tech companies investing in AI infrastructure. The company also anticipates that memory demand from PC and mobile markets, which have been slower to recover, will experience steady growth in the coming year, supported by the introduction of AI-optimized devices.
“In the coming years, as AI applications expand, we expect the role of memory chips to broaden, supporting stable market growth,” said Kim Woohyun, SK Hynix’s chief financial officer, during an earnings call.
Despite broader challenges in the memory market due to geopolitical tensions, oversupply, and weak end-market demand, SK Hynix has continued to innovate. The company recently began mass production of its latest HBM chips, with deliveries expected by the end of 2023.
Following the earnings announcement, SK Hynix shares saw a brief drop of 0.4% but recovered to trade up 1.3% later in the day.
