SK Hynix has seen “explosive” demand for AI memory, and the company posted record profits this quarter, tied to orders from NVIDIA and other AI giants.
SK Hynix is becoming the leading AI memory supplier in the industry, leaving no room for competition to grow
SK Hynix has been at the forefront of supplying HBM and other key components to the AI industry, and with the South Korean giant initially limited to a few customers, they have capitalized on the market opportunity in a huge way, leading towards establishing a monopoly over the AI memory segment, leaving no room for competitors like Samsung. In its recent earnings, SK Hynix reported a record operating profit, with the company seeing QoQ revenue growth of up to 94%, a truly astounding number.
Based on the report of BNN BloombergThe South Korean memory maker posted an operating profit of 7.03 trillion won ($5.1 billion) in the quarter, on total revenue of 17.6 trillion won ($12.75 billion), and interestingly, this is almost double the of what the company reported last quarter. The reason for such huge growth is simply related to the fact that competitors like Samsung Electronics and Micron they are not able to come to the market’s attentionwhile SK Hynix dominates the AI memory segment, especially in HBM and DRAM sales.
Looking ahead, SK Hynix is expected to maintain this leadership in the memory markets, given that competitors cannot see the market spotlight and the company’s next-generation memory processes, mainly HBM3E and HBM4said to be industry-leading, fueling its adoption by AI tech giants. The South Korean giant is said to be investing heavily in research and development facilities and has started focusing on advanced processes; therefore, the firm appears to have a sustainable economic future.
Interestingly, SK Hynix is said to be booked until 2025 through long-term contracts, and the firm believes that the HBM business will evolve rapidly next year, given that AI companies are involved in rapidly increasing their computing power. With HBM’s ASP (average selling prices) also expected to rise in parallel, we expect the firm to achieve much higher revenue targets next year, given that the AI bandwagon is still on.
As for competitors, well, they can’t compete with SK Hynix in the AI memory race, given that companies like Samsung have failed to capitalize on the market’s prospects, which has significantly increased SK Hynix’s influence in the AI supply chain. and moving into the future, with the release of HBM4, we expect this gap to separate even further.