SK Hynix scores record profits, doubles sales on AI demand

The leading position of SK Hynix Inc. (Seoul, South Korea) in high bandwidth memory (HBM) DRAM enabled the company to make a record net profit of about US$4.14 billion in the 3Q24 on sales revenue that nearly doubled year-on-year to about US$12.65 billion.

The company announced sales of 17.57 trillion won (about US$12.65 billion) in 2Q24, up 7 percent sequentially and up 94 percent year-on-year. The company made 5.75 trillion won in net profit, with a net margin of 33 percent.

In the same quarter a year before SK Hynix was loss making.

The company said that demand for AI memory continued to be strong at data center customers and the revenue jump was due to expanding sales of premium products such as HBM and embedded solid-state drives (eSSDs). HBM increased by 70 percent from the previous quarter and more than quadrupled – up 330 percent – from the same period a year before.

In HBM SK Hynix is outperforming rivals and is making a rapid transition from HBM3 to eight-layer HBM3E products.

SK Hynix said it plans to start supplying 12-layer HBM3E products in 4Q24 as scheduled. HBM sales accounted for 30 percent of total DRAM revenues in 3Q24 and are expected to be 40 percent of DRAM sales in 4Q24, the company said.

Profits were helped by SK Hynix’s ability to raise average selling prices (ASPs) for both DRAM and NAND memory. ASP rises were in the middle of the 10 to 20 percent range compared to the previous quarter.

The company said that demand for HBM and eSSD for AI servers has been ramping throughout 2023 and is set to continue in 2025. This is because generative AI is moving into a multi-modal form – where applications can handle a mixture of audio, video, photos and text and speech inputs – and because hyperscalers continue invest to develop artificial general intelligence (AGI).

At the same time the addition of AI capabilities to PC and smartphones will create further demand for AI memories optimized for each device.

“SK Hynix has solidified its position as the world’s number one AI memory company by achieving the highest business performance ever in the third quarter of this year.” said Kim Woohyun, CFO at SK Hynix, in a statement.