Illustration of the SK Hynix company logo seen displayed on a smartphone screen.
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South Korea’s SK Hynix, one of the largest memory chipmakers in the world, posted record quarterly earnings Thursday on the back of strong sales of high bandwidth memory used in generative AI chipsets.
SK Hynix shares, however, fell 2.7% as CFO Kim Woohyun warned that the outlook for memory demand in 2025 was clouded by inventory adjustments from PC and smartphone manufacturers as well as strengthened protective trade policies and geopolitical risks.
Here are SK Hynix’s fourth-quarter results compared with LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate:
- Revenue: 19.77 trillion won ($13.7 billion) vs. 19.91 trillion won
- Operating profit: 8.08 trillion won ($5.6 billion) vs. 8.02 trillion won
Revenue rose about 75% in the October-December quarter compared with the same period a year earlier, while operating profit surged 2,236% to 8.08 trillion, year on year.
On a quarter-on-quarter basis revenue was up 12%, while operating profit grew 15% to a fresh record high.
The chipmaker has benefitted from a boom in artificial intelligence servers and is a key supplier to U.S. AI chip designer Nvidia.
“With prolonged strong demand for AI memory, the company achieved [an] all-time high result through world-leading HBM technology and profitability-oriented operation,” SK Hynix said in its earnings release.
HBM is a type of dynamic random access memory, or DRAM, in which chips are vertically stacked to save space and reduce power consumption. Micron Technology and Samsung Electronics are the other key players the HBM space.
SK Hynix’s strong fourth-quarter numbers conclude a year that saw the company reach record yearly revenue, beating the previous high in 2022 by over 21 trillion won. Meanwhile, operating profit beat a record set in 2018 during a “super boom” in the semiconductor industry.
During the earnings call, SK Hynix management said that the company could see a “slight increase” in capital expenditure in 2025 compared with the prior year.
Demand uncertainty in 2025 aside, the company forecasts that sales growth of HBM and other DRAM products will continue as large tech companies keep investing in AI servers and as training AI models gains more traction.
The consumer market for PC and smartphones equipped with AI should also expand, with sales picking up in the second half of the year, the company said.
“The Memory industry is transitioning from a commodity market driven by volume and price to a customized market focused on high performance and high quality products,” Kim said in the earnings call.
“All in all, this year, DRAM demand is projected to grow by a mid to high teen percentage, while NAND demand is expected to increase by a low teen percentage,” he added.
NAND is another type of memory chip that often works together with DRAM in PCs, servers and smartphones.
Speaking to CNBC’s “Street Signs Asia” Thursday, SK Kim, analyst at Daiwa Capital Markets, said SK Hynix’s fourth-quarter earnings were “quite robust,” but noted that investors may be concerned about the market entering an adjustment period. He added that SK Hynix will maintain a leadership position in HBM.
SK Hynix’s shares have gained 29% so far this year, according to LSEG data.
Correction: This article has been revised to reflect updated quarter-on-quarter growth data after SK Hynix amended its press release.
