South Korea’s SK Hynix Reports Strong Q3 Results

SK Hynix Inc (KS:000660) reported unexpectedly strong third-quarter profits on Thursday, driven by robust sales of advanced memory chips for artificial intelligence applications.

The company, a significant supplier to NVIDIA Corporation (NASDAQ:NVDA), recorded an operating profit of 7.03 trillion won ($5.07 billion) for the three months ending September 30, surpassing Reuters' estimate of 6.8 trillion won. This marked a significant recovery from a 1.8 trillion won loss last year.

Revenue nearly doubled to 17.57 trillion won, with demand from the AI sector, particularly in data centers, being a key contributor to its earnings growth.

As a major player in the AI boom, SK Hynix specializes in high-bandwidth memory chips used in AI chipsets, holding the position of the world's second-largest memory chip manufacturer by volume, following Samsung Electronics Co Ltd (KS:005930).

HBM sales surged 70% quarter-over-quarter and grew 330% year-over-year. NVIDIA's demand has been instrumental in SK Hynix’s performance, helping it to significantly outpace competitors like Samsung and Micron Technology Inc (NASDAQ:MU).

In September, SK Hynix announced it had begun mass production of its latest generation of HBM chips, the most advanced memory chips currently available.

As of early 2024, the firm’s shares have risen nearly 38%, although they are down from record highs reached earlier in the year.