Nvidia supplier SK hynix reports record third-quarter financial results amid strong demand for AI storage

Driven by strong demand for AI-related storage products, Nvidia (NVDA, Financials) supplier SK hynix achieved record financial performance in the third quarter of 2024. With sales of 17.57 trillion won, operating profit of 7.03 trillion won and net profit of 5.75 trillion won, the company’s largest quarterly performance to date.

Operating and net income exceeded peaks reached during the semiconductor boom in the third quarter of 2018; Sales exceeded the record of 16.42 trillion won set in the second quarter of 2024. The company credited higher sales of high-value goods, including enterprise solid-state drives and high-bandwidth memory, which helped lift the average DRAM and NAND sales price by over 10%.

Due to continued demand from data center customers, HBM’s share of DRAM revenue increased to 30% in the third quarter and could approach 40% in the fourth quarter. Driven by breakthroughs in generative artificial intelligence and significant investments from technology companies, SK hynix expects this trend to continue beyond 2025 as the AI ​​industry expands.

In the fourth quarter of 2024, the company plans to begin selling 12-layer HBM3E products and is also transitioning to next-generation HBM3E storage. SK hynix aims to maximize investment and production in the NAND market while increasing sales of high-capacity eSSDs to meet increasing demand.

Kim Woohyun, vice president and CFO of SK Hynix, said the company keeps profitability in mind and will continue to change its supply and product policies to meet market conditions.

This article first appeared on GuruFocus.