South Korean chipmaking giant SK hynix Inc. said Thursday its fourth-quarter earnings hit a record high on rising demand for artificial intelligence chips, including high bandwidth memory, sharply beating market expectations.
Its 2024 revenues and operating profits also broke previous records, the company said.
The world's second-largest memory chipmaker said in a regulatory filing that its fourth-quarter net income reached 8 trillion won ($5.6 billion), shifting from a loss of 1.37 trillion won a year earlier.
Its operating income for the October-December period shot up more than 20 times to 8.08 trillion won from 346 billion won a year ago. Its sales vaulted 74.8 percent on-year to 19.76 trillion won.
The earnings beat market expectations. The average estimate of net profit by analysts stood at 5.99 trillion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
SK hynix attributed the better-than-expected bottom line to strong demand for AI memory, solidifying its status as a world leader in HBM technology.
For the entire 2024, its net income amounted to a record 19.79 trillion won, swinging from a loss of 9.13 trillion won a year earlier.
Operating income also turned to the black, reaching a record 23.46 trillion from a loss of 7.73 trillion won in 2023. Its previous record of 20.8 trillion won was set in 2018 during the semiconductor super boom.
Annual revenue soared 102 percent to 66.19 trillion won, exceeding the previous record of 44 trillion won set in 2022.
The company said sales of HBM continued rapid growth in the fourth quarter, accounting for more than 40 percent of its total DRAM revenue. Steady demand for enterprise solid state drive also lent support to the robust sales.
SK hynix is leading the HBM industry, which has been growing rapidly with a generative AI boom.
It started providing the eight-layer HBM3E chips to US AI giant Nvidia Corp. in March, and mass-producing the most advanced 12-layer HBM3E chips in September, becoming the first to do so in the world.
"The annual result of 2024 demonstrated the memory company's possibility of stable profit gain by supplying products at the right time to meet customer needs," SK hynix said, adding that the memory sector is currently transforming into a high-performance, high-quality market driven by AI memory demand.
Based on the financial result, SK hynix said its cash equivalent increased by 5.2 trillion won to 14.2 trillion won as of end-2024 compared with the end of 2023. Its debt decreased by 6.8 trillion won to 22.7 trillion won over the one-year period.
SK hynix forecast that the demand for HBM and high-density server DRAM, which is essential in high performance computing, will continue to increase throughout 2025, citing growing investments in AI servers by global big tech companies and rising importance for AI inference technology.
For the relatively sluggish consumer market, sales of personal computers and smartphones equipped with AI are expected to expand in the second half.
"Therefore, the company plans to expand HBM3E supply and develop HBM4 at the right time to meet the customers' needs," SK hynix said.
Earlier, SK hynix announced its development of the 16-layer HBM3E chips in November and plans to mass-produce the sixth-generation HBM4 in the second half of 2025.
In addition, the company said it will push for the transition to advanced production process for steady-selling DRAM memories, including DDR5 and LPDDR5.
Meanwhile, SK hynix raised the annual fixed dividend by 25 percent to 1,500 won per share from 1,200 won and hiked the total amount of the cash dividend to 1 trillion won annually.
"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," Kim Woo-hyun, chief financial officer at SK hynix, said.
"While maintaining the profitability-first commitment, the company will make flexible investment decisions in line with the market situation." (Yonhap)
