South Korea's SK Hynix reported a more than five-fold jump in first-quarter operating profit, marking a record high driven by robust demand for memory chips amid the ongoing artificial intelligence boom. The surge underscores the escalating demand from major tech companies building AI data centers, which has tightened chip supplies and increased prices for both advanced and conventional memory products.
SK Hynix stated that the evolution of AI, from large model training to real-time inference, is expanding memory demand across DRAM and NAND flash technologies. Contract prices for certain DRAM chips rose nearly 83% and NAND products soared around 160% in the first quarter, according to TrendForce. Prices are expected to climb further this quarter as AI firms secure essential chips for infrastructure.
Despite potential easing in price increases after the second quarter, constrained supply is anticipated to persist until new production capacity becomes available. SK Hynix expects a favorable pricing environment to continue, with AI-driven demand offsetting softer demand from PC and smartphone manufacturers. The company is accelerating capacity expansion, including a new South Korean plant, to meet this surging demand and is significantly increasing this year's investment, focusing on infrastructure development and securing key equipment like EUVs.
SK Hynix's first-quarter operating profit reached 37.6 trillion won ($25.42 billion), a substantial increase from 7.4 trillion won a year prior. Quarterly revenue grew 198% to 52.6 trillion won. The company's stock has surged nearly 90% this year, boosting its market value to approximately $590 billion, surpassing ASML.