SK hynix posted record revenues for its latest quarter today as it seeks to strengthen its position in the AI memory market.
The South Korean firm is a key supplier to Nvidia, and has benefited from the market boom in AI servers.
The company reported ₩17.5731 trillion ($12.65 billion) in sales for the third quarter, an increase of 7 percent on the previous quarter. It also said the operating profit was ₩7.03 trillion ($5.06 billion), with an operating margin of 40 percent. There was a ₩5.7534 trillion ($4.14 billion) net profit with a net margin of 33 percent.
The revenues marked an all-time high, exceeding the previous record of ₩16.4233 trillion in the second quarter of this year by more than ₩1 trillion. The operating profit and net profit also exceeded the record of ₩6.4724 trillion and ₩4.6922 trillion, respectively, posted in the third quarter of 2018 “during the semiconductor super boom,” said SK hynix.
The provider said demand for AI memory in the last quarter continued to be “strong,” centered on datacenter customers, with the company expanding sales of “premium products” such as HBM (high-bandwidth memory) and eSSD (enterprise solid-state drives). In particular, HBM sales achieved growth of over 70 percent from the previous quarter, and more than 330 percent when compared to the same period last year.
HBM is a type of dynamic random access memory (DRAM), in which chips are vertically stacked to save space and reduce power consumption. They are connected to a GPU via an interposer unit instead of the x86 CPU-type socket connection to memory, which limits DRAM capacity and memory-to-CPU bandwidth by socket count restrictions.
“The demand of memory for AI servers, like HBM and eSSD, has grown noticeably this year, and the company predicts this trend will continue next year. This is because generative AI is developing into a multi-modal form, and global big tech companies continue to invest to develop artificial general intelligence (AGI),” said the company.
“Multi-modal” is an AI service that can understand multiple information types such as text, photos, voice, video, and so on. AGI implements human-like or higher intelligence with a computer.
Wedbush analyst Matt Bryson informed subscribers: “Hynix suggested HBM demand is more likely to exceed their expectations in 2025 (and capacity plans), taking the opposite side vs. recent concerns re: oversupply of HBM (and memory in general).”
SK hynix also forecasts that the PC and mobile product markets, which had been “slow to recover demand” when compared to memory for AI servers, will be on a “steady growth path” as well next year as AI memories optimized for these devices are released. Last year, the memory market experienced a severe downturn, caused by oversupply and weaker overall demand.
Kim Woohyun, vice president and chief financial officer at SK hynix, said: “We will continue to maximize profitability while securing stable revenues by adopting flexible product and supply strategies.”