(3rd LD) SK hynix Soars Past Q1 Profit Forecasts Thanks to HBM Gains

(3rd LD) SK Hynix Reports Q1 Earnings

SEOUL, April 24 (Yonhap) — On Thursday, SK Hynix announced that their net income for the first quarter had more than quadrupled due to increased demand for AI chips such as High Bandwidth Memory (HBM). This result surpassed market forecasts.

In a regulatory submission, the planet’s number two producer of memory chips reported that its net profit climbed to 8.1 trillion won ($5.7 billion) during the Jan-Mar quarter, an increase from 1.92 trillion won in the same stretch of the previous year.

The company’s operating income jumped 157.8 percent year-over-year to 7.44 trillion won for the quarter, up from 2.88 trillion won during the same period last year. Additionally, revenue increased by 41.9 percent to reach 17.63 trillion won.

Not only did the operating profit and sales achieve their second-highest quarterly results ever, but they also followed the peak numbers recorded during the fourth quarter of last year.

The profits surpassed market expectations. Analysts had predicted an average net income of around 5.48 trillion won, as per a survey conducted by Yonhap Infomax, which is the financial information division of Yonhap News Agency.

The improved financial performance of SK hynix surpassed expectations due to robust demand for AI memory, reinforcing their position as a global frontrunner in HBM technology.

"Due to the rivalry in developing AI systems and the unexpected surge in inventory demands, the memory market escalated more quickly than anticipated," according to SK Hynix.

SK Hynix's projected quarterly operating profit is anticipated to exceed that of its competitor Samsung Electronics Co., as Samsung recently announced an estimated operating profit of 6.6 trillion won for the initial quarter.

This represents the second occasion on which SK Hynix has outpaced Samsung Electronics in terms of operating profit, coming after the fourth quarter of last year. Samsung Electronics operates across various sectors including semiconductors, home appliances, and mobile devices.

SK hynix has stated that their projected annual HBM sales for 2025 are anticipated to be twice as high as those in 2024, noting that all sales orders for next year have already been confirmed.

The CEO of the company, Kwak Noh-jung, recently stated that all of this year’s HBM production has been sold out. The company is currently providing its 12-layer HBM3E product to key clients such as Nvidia Corp.

The sale of 12-layer HBM3E, which is presently the most sophisticated HBM in widespread manufacturing, is anticipated to make up more than fifty percent of all its HBM3E sales during the next quarter.

For the sixth-generation HBM4 memory chips, SK hynix aims to finalize their preparation for large-scale manufacturing by the end of this year.

SK Hynix plans to concentrate on products that demonstrate both demand viability and profitability to boost investment effectiveness," stated Kim Woo-hyun, who serves as the Chief Financial Officer at SK Hynix. "Given our position as a frontrunner in AI memory solutions, we aim to deepen partnerships and drive technological advancements to sustain profit increases while maintaining top-tier competitive edge within the sector.

In an earnings call, SK Hynix highlighted that their customer relations continue to be robust even as uncertainties escalate due to the fluctuating U.S. tariff policies.

Earlier this month, the U.S. government introduced minimum tariffs along with specific retaliatory duties, such as a 25% tax on goods from South Korea. Nonetheless, President Donald Trump declared a temporary suspension of these retaliatory taxes for a period of 90 days.

At present, imported semiconductors enjoy an exemption from reciprocal tariffs; however, Trump has stated that new duties on these components will be implemented shortly.

The company stated that at present, it is challenging to forecast the course and effects of U.S. tariff policies. Following an official declaration, they will react appropriately, maintaining constant communication with their clients to guarantee a steady supply.

Shares of SK Hynix dropped 1.16% to reach 178,900 won by 10:45 a.m., lagging behind the wider KOSPI index which declined by 0.51%. The firm had published its financial statements prior to the opening of the markets.

brk@yna.co.kr

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