SK hynix, leading the high-bandwidth memory (HBM) market where demand has surged with the opening of the artificial intelligence (AI) market, once again set a record for the highest quarterly results in the third quarter (April to June) this year. As HBM supply jumped in step with the growth of the AI industry, it is assessed that the company extended its strong performance by gaining the upper hand in the fifth-generation HBM (HBM3E) 12-high market. SK hynix said it has wrapped up supply talks with major customers regarding next year's HBM volumes and explained that HBM of the sixth generation (HBM4), which has emerged as the next battleground, will begin full-scale shipments from the fourth quarter.
SK hynix announced in a filing on the 29th that on a consolidation basis, operating profit for the third quarter this year came to 11.3834 trillion won, up 62% from a year earlier on a provisional tally. The operating margin was 47%. Third-quarter revenue rose 39% from the same period last year to 24.4489 trillion won. The results are similar to the securities industry's operating profit forecast of 11.4142 trillion won.
SK hynix said, "As customers expanded AI infrastructure investment, demand across memory surged," adding, "With increased sales of high value-added products such as HBM3E 12-high and server-bound DDR5, we once again surpassed the all-time record we set last quarter."
SK hynix projected that as the AI market rapidly shifts toward inference, there is a move to distribute the computational load of AI servers across various infrastructure such as general-purpose servers, which will expand demand across memory including high-performance DDR5 and eSSD. The company also said it is positive that major AI corporations have recently been signing strategic partnerships in succession and announcing AI data center expansion plans. This is expected to drive balanced demand growth across a wide range of product lines, not only for HBM but also for general server memory.
Accordingly, SK hynix will accelerate the transition to the most advanced 10-nanometer-class sixth-generation (1c) process, which is in stable mass production, to build out DRAM product lines for servers, mobile, and graphics and expand supply to meet customer demand. In NAND, the company plans to increase supply of its world's tallest 321-layer product to respond quickly to customer needs.
Meanwhile, SK hynix said it has completed all supply talks for next year's HBM with major customers. Among them, HBM4, for which development was completed in September and a mass production system established, has been prepared to meet all customer-required performance and to support the industry's highest speeds, the company explained. SK hynix plans to begin shipping it from the fourth quarter and move to full-fledged sales expansion next year. The industry expects that, having wrapped up supply negotiations with Nvidia, a big HBM buyer, the company will make an all-out supply of HBM4 and more to Nvidia. In addition, SK hynix said that due to the surging AI memory demand, it has secured customer demand through next year for all DRAM and NAND products.
To respond to customer demand that exceeded expectations, SK hynix plans to rapidly secure new capacity through M15X, for which it recently opened a cleanroom early and began moving in equipment, and accelerate the transition to advanced nodes.
Accordingly, next year's investment scale is planned to increase from this year, and the company said it will maintain an optimized investment strategy in line with market conditions. Kim Woo-hyun, SK hynix executive vice president and CFO, said, "With AI-driven technological innovation, the memory market is shifting to a new paradigm and demand has begun to spread across all product areas," adding, "We will continue to respond to customer demand based on market-leading products and differentiated technological competitiveness and firmly safeguard our AI memory leadership."