Image Credits - AFP
SK Hynix, the world’s second-largest memory chip maker based in South Korea, has declared a return to profitability after enduring four consecutive quarters of losses. The key driver behind this remarkable turnaround is attributed to the robust demand for memory chips, particularly those utilized in artificial intelligence (AI) applications.
The financial results for the October-December period reflect an operating profit of 346 billion won ($259.4 million), marking a substantial improvement from the 1.9 trillion won loss recorded during the same period in the previous year.
SK Hynix’s flagship products, DDR5 and HBM3, experienced an extraordinary surge in sales, increasing more than four and five times, respectively, throughout the year. The widespread adoption of these memory chips in AI-related applications contributed significantly to the company’s positive performance. The memory giant reported a 47% year-on-year increase in sales, reaching 11.3 trillion won in the fourth quarter.
The resurgence of SK Hynix is closely tied to the burgeoning demand for memory chips driven by the rapid expansion of AI technologies. These chips play a vital role in enhancing the performance of AI applications, and the increasing integration of AI across various industries has fueled the demand for advanced memory solutions. Additionally, the strong sales were also influenced by the widespread use of memory chips in mobile applications, further contributing to the company’s financial recovery.
While the fourth quarter showcased a return to profitability, SK Hynix reported a full-year loss of 9.1 trillion won. The challenging conditions prevalent in the semiconductor industry throughout the preceding year had a lasting impact on the company’s overall financial performance. However, the notable gains in the fourth quarter have significantly mitigated the impact of the full-year losses.
Vice President Kim Woo-hyun expressed confidence in SK Hynix’s technological leadership, particularly in the AI memory space. Looking ahead, the company aims to evolve into a “total AI memory provider” in 2024. This strategic shift includes offering customized solutions to meet the evolving demands of AI applications, positioning SK Hynix for what it terms “an era for a new leap forward.”
As South Korea’s second most valuable company, SK Hynix boasts a market capitalization of over 101 trillion won. While the semiconductor giant has made significant strides, it trails behind Samsung Electronics, which holds a substantial market capitalization of 443 trillion won. The upcoming earnings release from Samsung Electronics on January 31 is anticipated to provide additional insights into the performance of the semiconductor industry in South Korea.