SK hynix has reported a 158% year-on-year rise in first-quarter (Q1 2025) operating profit to $5.2bn, supported by increased demand for AI memory solutions. The performance marked the company’s second-best quarterly result, driven by sales of advanced high-bandwidth memory (HBM) and DDR5 DRAM modules.
Total revenue for Q1 2025 rose 42% to $12.3bn, while net profit reached $5.7bn. The South Korean semiconductor firm attributed the growth to robust procurement by data centres and strategic purchases by clients ahead of possible trade restrictions, particularly from the US.
Long-term AI contracts seen offsetting US tariff uncertainty
While Washington continues to review semiconductor imports under national security grounds, SK hynix expects a limited short-term impact on its AI memory business. “While reciprocal tariff measures between some countries are currently suspended, there are growing concerns that tariffs can be applied to semiconductor products,” said a company executive on the earnings call. The company noted that existing long-term contracts for HBM supply offer some protection against abrupt policy shifts.
SK hynix maintained its projection that revenue from its HBM product line will more than double in 2025. It anticipates that sales of its 12-layer HBM3E modules will comprise over 50% of total HBM3E revenue in the second quarter. Additionally, the company began shipments of LPCAMM2 memory modules for AI personal computers and is preparing to launch SOCAMM2 modules targeted at AI servers as market demand increases. SK hynix also confirmed that last month it had shipped the industry’s first samples of HBM4 12Hi to customers and plans to begin mass production within the year. The company indicated that it is continuing its scheduled transition from HBM3E 8Hi to 12Hi configurations in the second quarter as part of its ongoing development of AI-focused memory solutions.
Although some analysts have cautioned about potential demand softening in the latter half of the year due to recent industry stockpiling, SK hynix indicated that underlying structural demand for AI infrastructure remains strong. The company added that forward visibility on tariff implementation remains limited, and current market signals do not suggest an immediate slowdown.
To strengthen its manufacturing capacity, SK hynix will invest more than $14bn in a new DRAM fabrication facility in Cheongju, South Korea. Construction is scheduled to begin by the end of this month, with mass production slated to start in November. The fab will focus on next-generation memory products, including HBM.
The company ended the quarter with $10bn in cash and equivalents, up $146m from the previous period. Its net debt ratio improved to 11%, reflecting continued focus on financial discipline and capital efficiency.
“In compliance with the ‘Capex Discipline’, SK hynix will focus on products with demand feasibility and profitability to enhance investment efficiency,” said CFO Kim Woohyun. “As an AI memory leader, we will strengthen collaboration with partners and carry out technological innovation in efforts to continue profit growth with industry-leading competitiveness.”
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