SK hynix has projected a significant surge in demand for its advanced memory chips, driven by their application in generative AI systems. The South Korean semiconductor giant anticipates that sales of these chips will more than double this year, underscoring the growing reliance on AI technologies across industry. This announcement follows a 30% surge in the company’s stock this year, fuelled by strong demand for AI memory products and partnerships with companies such as Nvidia. Despite the optimism, SK hynix shares briefly fell 4.7% after cautioning about declining demand for commodity memory chips, before recovering to close 0.2% lower.
The company, a key supplier of high-bandwidth memory (HBM) chips essential for AI servers, expects continued growth in AI-driven demand as investments in AI infrastructure accelerate globally. SK hynix plans to expand the production of its HBM3E chips and advance the development of HBM4 to meet customer needs in the high-performance computing sector.
SK hynix’s 2024 and Q4 2024 financial results
SK hynix reported its best-ever financial performance in 2024, with annual revenue reaching KRW66.2 trillion ($46.1bn), a 48% increase from the prior year. Operating profit totalled KRW23.47 trillion ($16.3bn), while net profit stood at KRW19.8 trillion ($13.7bn). These results were attributed to strong sales of AI memory products, including HBM and enterprise solid-state drives (eSSD), and the company’s focus on profitability-driven operations.
“With [a] significantly increased portion of high value-added products, SK hynix has built the fundamentals to achieve sustainable revenues and profits even in times of market correction,” said SK hynix vice president and chief financial officer Kim Woohyun. “While maintaining the profitability-first commitment, the company will make flexible investment decisions in line with market situation.”
In Q4 2024, SK hynix achieved revenue of KRW19.8 trillion ($13.8bn), a 12% increase quarter-on-quarter. Operating profit grew 15% to KRW8 trillion ($5.6bn), while net profit reached KRW8 trillion ($5.6bn). HBM products accounted for over 40% of total DRAM revenue in the quarter, highlighting the growing role of AI-focused technologies in the company’s portfolio.
SK hynix noted that the increasing adoption of AI technologies is driving demand for its advanced DRAM products, including HBM and high-density server DRAM. The company expects further growth in AI-enabled consumer devices, such as PCs and smartphones, in the second half of 2025, following inventory adjustments in the market.
However, strong demand for traditional memory products may prove to be temporary. SK hynix forecasts a 10% to 20% decline in shipments of DRAM and NAND flash products in the first quarter of 2025, primarily due to weaker demand from smartphones and computers, as well as rising competition from Chinese manufacturers.
Looking ahead, the memory chip giant outlined its plans to focus on sustainable profitability by leveraging differentiation in AI product offerings and maintaining a profitability-driven operational approach. The company aims to advance the adoption of manufacturing processes for DDR5 and LPDDR5 memory products to align with market demands for technological advancements.
In its NAND business, SK hynix indicated it would prioritise profitability through adaptable sales strategies designed to respond to changing market conditions. The company stated it will continue aligning its product portfolio with growing demand for AI memory to address evolving market dynamics and pursue long-term stability.
Read more: Nvidia urges SK hynix to accelerate HBM4 chip supply amid growing AI demand
