SK hynix profit surges in Q2 on robust sales of HBM

SK hynix, a supplier to Nvidia, turned to profit in the second quarter, logging 5.5 trillion won ($3.96 billion) in operating profit, driven by robust sales of premium memory chips like high bandwidth memory (HBM).

SK hynix's Icheon headquarters in Gyeonggi [NEWS1]

SK hynix, a supplier to Nvidia, swung to profit in the second quarter, logging 5.5 trillion won ($3.96 billion) in operating profit driven by robust sales of premium chips including high bandwidth memory (HBM).

The company reported an all-time high quarterly revenue of 16.4 trillion won, surpassing the previous record of 13.8 trillion won from the second quarter of 2022. Both figures slightly exceeded the market consensus compiled by FnGuide, which had anticipated 5.2 trillion won in operating profit and 16.2 trillion won in revenue.

“Sales rose by 32 percent compared to the previous quarter due to strong demand for AI memory such as HBM, eSSD, as well as increasing prices for DRAM [dynamic random access memory] and NAND in general,” the company said in a release Thursday.

Sales of HBM, an essential part of the processors used to power AI, played a key role in driving up SK hynix's revenue. The company's HBM sales in the second quarter rose by 80 percent compared to the previous quarter and by more than 250 percent compared to the year before, according to the company.

The firm anticipates at least a twofold increase of HBM shipments next year compared to this year.

The company will begin supplying its 12-high HBM3E, its fifth-generation premium memory chip, to clients in the fourth quarter of this year in a move to maintain dominance in the segment.

Samsung Electronics is currently focused on 12-high HBM3E, with plans for mass production before the end of this year.

The market trend is expected to shift to 12-high from eight-high starting next year.

“Sales of 12-layered HBM3E will exceed those of eight-layered ones from the first half of next year,” said Kim Woo-hyun, chief financial officer of SK hynix during a conference call on Thursday.

But eight-layered HBM3E is the more widely used silicon at the moment, known to be deployed in Nvidia's H200 and B100 GPUs.

SK hynix is swiftly ramping up its manufacturing facilities to meet growing demand for AI memory chips.

It recently broke ground on an M15X line in Cheongju, North Chungcheong, to make advanced DRAM chips, including HBM, with a target of starting operations in the latter half of next year. It also is in the site construction process for its facilities in the state-backed Yongin, Gyeonggi chip cluster.

This will result in increased capital expenditure for this year compared to what was initially planned, the chipmaker said.

SK hynix shares, however, nose-dived Thursday, falling by 8.9 percent to close at 190,000 won as investors went on a selling spree.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]