Nvidia Supplier SK Hynix Reports Record Quarterly Profit as AI Demand Drives 7% Revenue Increase – NVIDIA (NASDAQ:NVDA), SK Hynix (OTC:HXSCF)

SK Hynix HXSCFa major manufacturer of memory chips and a major supplier of Nvidia Corp. NVDAhas announced record-breaking quarterly profit, driven by rising demand for artificial intelligence technologies.

What happened: The South Korean semiconductor company posted revenue of 17.5731 trillion won ($12.65 billion), up 7% quarter-on-quarter. Operating profit rose to 7.03 trillion won (US$5.06 billion) and net profit reached 5.7534 trillion won (US$4.14 billion), marking a significant year-on-year increase.

This represents SK Hynix’s highest quarterly revenue ever, surpassing the previous record of 16.4233 trillion won set in the second quarter of 2024.

The company attributed this growth to increasing sales of premium storage products such as high-bandwidth storage (HBM) and enterprise solid-state drives (eSSD), which meet the booming demand for AI servers.

In the third quarter, HBM accounted for 30% of SK Hynix’s total DRAM sales, with product sales increasing more than 70% quarter-on-quarter. The company expects HBM’s share to increase to 40% in the fourth quarter as production of the newer 8-layer and 12-layer HBM3E models ramps up, reflecting strong demand from data centers and AI developers reflects.

“SK Hynix has consolidated its position as the world’s leading AI storage company by achieving its highest-ever business performance in the third quarter of this year,” he said Kim WoohyunVice President and Chief Financial Officer at SK Hynix. “We will continue to maximize profitability while maintaining stable sales by pursuing flexible product and delivery strategies based on market demand.”

SK Hynix predicts that demand for AI storage will remain robust in 2025, driven by advances in generative AI and artificial general intelligence. Additionally, the company expects steady growth in the PC and mobile markets, which have lagged behind the AI ​​sector.

The company plans to improve its NAND activities by expanding sales of high-capacity eSSDs and optimizing production efficiency. In addition, the company will continue to move to more advanced DRAM technologies, ensuring its leadership position in the AI ​​memory market.

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Why it matters: This announcement comes after a period of volatility for SK Hynix. In September, the company’s shares plunged to their lowest level since February following a downgrade Morgan Stanley. The investment bank warned that “storage conditions are starting to deteriorate” and that it would be difficult for SK Hynix to maintain revenue growth and margins.

However, the company’s fortunes quickly changed when it announced mass production of its latest high-bandwidth memory chips. This development, which gave SK Hynix a head start in the competition to meet growing demand driven by AI advances, led to a 9% rise in the company’s shares.

Analysts have long been optimistic about SK Hynix’s future, with many predicting that the company will continue to benefit from increasing demand for AI technology. In July, for example Goldman Sachs And Citigroup Both raised their price targets for SK Hynix, citing the company’s high potential for AI and expectations of a positive earnings surprise.

Price action: SK Hynix is ​​currently trading at 1,98,300 won, up 1.17% on Thursday. The stock has gained 39.26% year-to-date, according to data from Benzinga Pro.

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Image via SK Hynix

Disclaimer: This content was created in part using AI tools, and was reviewed and published by Benzinga editors.