(Bloomberg) — SK Hynix Inc. posted record quarterly profit and revenue, reflecting strong demand for the memory chips used with Nvidia Corp. processors for artificial intelligence development.
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The South Korean chipmaker recorded an operating profit of 7.03 trillion won ($5.1 billion) in the September quarter, versus the 6.9 trillion won projected. Revenue climbed 94% to 17.6 trillion won, compared with expectations for 18.2 trillion won.
SK Hynix’s shares have gained more than 35% this year as the company widened its lead over Samsung Electronics Co. and Micron Technology Inc. in designing and supplying the cutting-edge high-bandwidth memory that powers Nvidia’s AI accelerators. It expects to supply its top-of-the-line 12-layer HBM3E to Nvidia in the fourth quarter.
Earnings were also boosted by robust demand for enterprise solid-state drives, used in large companies’ data centers.
What Bloomberg Intelligence Says
SK Hynix’s 3Q operating-profit margin could have improved from 2Q due to better average selling prices (ASP) for DRAM chips, as Micron’s ASP climbed 15% in the previous quarter. SK Hynix’s dominant market share in high bandwidth memory (HBM) chips might have contributed to the solid operating margin, although demand for standard DRAM may be slowing down due to smartphones and PCs. ASP for NAND chips could have risen slightly along with Micron.
– Masahiro Wakasugi, analyst
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The broader memory chip market is recovering from a downturn in demand for smartphones and personal computers. Prices for memory chips have rebounded after a long slump.
SK Hynix has said its capital expenditure this year would likely top earlier plans, to keep pace with a boom in spending on AI hardware.
The Icheon-based based company has announced a slew of investment plans this year, including $3.87 billion to build an advanced packaging plant and research center for AI products in Indiana.
At home, it’s spending $14.6 billion building a new memory chip complex and proceeding with other domestic investments, including the government-backed Yongin Semiconductor Cluster project.
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