Seoul: SK hynix Inc. announced on Thursday a remarkable increase in its first-quarter net profit, driven by a surge in demand for artificial intelligence (AI) chips, particularly high bandwidth memory (HBM), which exceeded market expectations. The company reported a net income of 8.1 trillion won (US$5.7 billion) for the January-March period, a significant rise from 1.92 trillion won in the same period last year.
According to Yonhap News Agency, SK hynix's operating income witnessed a substantial 157.8 percent year-on-year growth, reaching 7.44 trillion won for the quarter, compared to 2.88 trillion won a year earlier. Revenue also saw a notable increase of 41.9 percent, amounting to 17.63 trillion won. These figures represent the second-best quarterly results for the company, following the record highs in the fourth quarter of the previous year.
The company's financial performance surpassed market expectations, with analysts estimating an average net profit of 5.48 trillion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency. SK hynix attributed this strong performance to the rising demand for AI memory, reinforcing its position as a global leader in HBM technology. The memory market experienced a quicker-than-anticipated ramp-up due to fierce competition in AI system development and inventory accumulation demand, the company stated.
SK hynix's quarterly operating profit is projected to exceed that of its competitor Samsung Electronics Co., which reported an operating profit of 6.6 trillion won in its first-quarter guidance. This marks the second instance where SK hynix has outperformed Samsung Electronics in operating profit, following the fourth quarter of last year.
Looking ahead, SK hynix anticipates its annual HBM sales for 2025 to double compared to those of 2024, with sales orders for 2025 already secured. The company's CEO, Kwak Noh-jung, previously mentioned that SK hynix has sold out its HBM production for this year, supplying its advanced 12-layer HBM3E product to major customers, including Nvidia Corp. The sales of 12-layer HBM3E, currently the most advanced HBM in mass production, are expected to constitute over half of the company's total HBM3E sales in the second quarter.
In preparation for the future, SK hynix plans to finalize preparations for mass production of its sixth-generation HBM4 chips by the end of this year. CFO Kim Woo-hyun stated that the company would focus on products with demand feasibility and profitability to enhance investment efficiency. As a leader in AI memory, SK hynix aims to strengthen collaborations with partners and pursue technological innovation to maintain profit growth with industry-leading competitiveness.
Despite uncertainties arising from U.S. tariff policies, SK hynix maintained that its customer relationships remain robust. Earlier this month, the U.S. government imposed baseline tariffs and country-specific reciprocal tariffs, including a 25 percent tariff on South Korean imports. However, President Donald Trump announced a 90-day pause on these reciprocal tariffs. While imported semiconductors are currently exempt from these tariffs, new tariffs on chips are expected to be imposed soon, according to Trump.
SK hynix stated that it is difficult to predict the direction and impact of U.S. tariff policies at this moment but assured that it would respond accordingly, maintaining close communication with its customers to ensure a stable supply chain. Despite the positive earnings report, SK hynix's stock fell 1.49 percent to close at 178,300 won, underperforming the broader KOSPI's 0.13 percent drop. The earnings report was released before the market opened.