South Korean memory chipmaker SK Hynix posted a record quarterly profit for the third quarter of 2023, driven by surging demand for its high bandwidth memory (HBM) products, which are used in generative AI applications. The company, a key supplier to Nvidia, has benefited significantly from the growing demand for artificial intelligence (AI) servers, which has boosted its sales of premium memory products.
For the July-September period, SK Hynix reported an operating profit of 7.03 trillion won ($5.08 billion), surpassing analysts’ expectations of 6.8 trillion won. This marked a sharp turnaround from the 1.8 trillion won loss the company recorded during the same period last year. Quarterly revenue reached 17.57 trillion won ($12.7 billion), up nearly 94% from the 9.1 trillion won in revenue reported a year earlier.
The surge in demand for AI-driven memory solutions, particularly from data center customers, was a key factor behind the company’s record-breaking performance. SK Hynix highlighted the growing sales of its HBM products, which were up more than 70% from the previous quarter and more than tripled compared to the same period last year. HBM, a type of dynamic random access memory (DRAM), is used in a variety of devices, including AI servers, laptops, and workstations, and is known for its ability to save space and reduce power consumption by vertically stacking chips.
SK Hynix is one of the top three manufacturers of HBM chips, alongside Micron Technology and Samsung Electronics. In a press release, the company said it expects continued growth in demand for AI memory products such as HBM and high-density enterprise SSDs (solid-state drives) used in servers. As generative AI technologies continue to evolve, large tech companies are investing heavily in AI development, further driving demand for advanced memory solutions.
The company also forecast steady growth in the consumer product market, particularly for PCs and mobile devices, as AI-optimized devices become more prevalent. SK Hynix predicts that as AI applications expand, the demand for memory will also broaden, contributing to stable market growth in the coming years.
In response to the strong demand, SK Hynix has ramped up production of its latest HBM chips, with plans to deliver the new products by the end of the year. Despite initial fluctuations in its stock price, SK Hynix shares rose by 1.3% on Thursday following the release of its earnings report.
