Buoyed by record sales and profits, chipmaker offers rosy outlook as HBM leader
SK hynix, the world's second-largest memory chip maker, logged its best-ever yearly earnings in 2024, successfully capitalizing on the global AI chip boom with its cutting-edge high bandwidth memory products.
The company reported Thursday it achieved 66.1 trillion won ($46.1 billion) in sales in 2024, increasing by a whopping 102 percent on-year. The operating profit stood at 23.4 trillion won with an operating margin of 35 percent, and net profit at 9.7 trillion won with a net margin of 30 percent.
The yearly sales figure marked an all-time high, exceeding the previous record set in 2022 by over 21 trillion won, and operating profit surpassed the record set in 2018 when it reached 20.8 trillion won.
The chipmaker also achieved record quarterly profit in the October-December period of 2024, with sales going up by 12 percent to 19.7 trillion won and operating profit by 15 percent to 8.08 trillion won.
"With a significantly increased proportion of high value-added AI chips, SK hynix has established the fundamentals needed to achieve sustainable revenues and profits even during market corrections,” said Kim Woo-hyun, vice president and chief financial officer at SK hynix, during an earnings call on Thursday.
“While maintaining our profitability-first commitment, the company will make flexible investment decisions in line with the market situation.”
The key driver of the record performance was HBM, the vertically-stacked DRAM chip that plays a critical role in enhancing the AI processing performance of graphic processing units.
According to SK hynix, its HBM sales jumped 4.5-fold in 2024 on-year to account for over 40 percent of total DRAM revenue in the fourth quarter. This year, the company forecast its HBM sales to increase by 100 percent.
The company expressed confidence in maintaining its leadership in the critical AI chip market, revealing that it has already started discussions with its clients about HBM supplies for 2026 and expects to finalize deals in the first half of this year.
SK hynix started shipping its latest 12-layer HBM3E to customers from the fourth quarter last year and developed the industry's first 16-layer HBM3E last November. The company plans to start shipments of the next-generation 12-layer HBM4 in the second half of this year.
The company said it is also preparing for mass production of the 16-layer HBM4 for delivery as early as the second half of next year, aligned with customer requests. For the cutting-edge chip, the company plans to adopt the advanced MR-MUF process, whose technological edge was proven with its application in HBM3E.
The chipmaker reaffirmed its partnership with Taiwan-based contract chip manufacturer TSMC to produce the logic die for its HBM4 chips, emphasizing that they are working together as "one team."
"There is no doubt about the long-term growth of HBM demand, with the AI market holding greater growth potential far exceeding our expectations. AI is transforming industries, and it will continue to generate strong computing demand," said Kim Ki-tae, SK hynix vice president and head of HBM sales and marketing.
SK hynix also unveiled a plan to apply the next-generation 1c nanometer node to produce HBM4E products in the future. Currently, mainstream HBM products are using 1b nm nodes.
As for high density server DRAM essential in high performance computing, mainly DDR5 and LPDDR5, the chipmaker said it will ramp up production to meet the increasing demand, backed by growing investment in AI servers and AI inference technology.
"Server DRAM demand is expected to remain strong, centered on DDR5. Hyperscale customers are continuing to expand their investments in building AI data centers which require efficient space utilization and high energy efficiency," Kim Kyu-hyun, head of DRAM marketing, said.
In response to slowing demand for legacy DRAM chips -- DDR4 and LPDDR4 -- the chipmaker said it will sharply scale down their share of production volume from last year’s 20 percent to a single digit this year.
The company will also stick to its strategy of cutting down NAND flash chip production and waiting for a gradual recovery of the market.
During the earnings call, SK hynix dispelled concerns over Chinese suppliers, which are rapidly expanding their market shares in legacy DRAMs and reportedly eyeing the market for more advanced DDR5 products, saying they are “significantly behind” in the advanced node technology.
“The latecomers (Chinese chipmakers) are significantly behind in advanced node technologies used by major leading suppliers, so there is a clear and wide gap in quality and performance. They are also expected to face great uncertainties in terms of advancement, given the ongoing (trade) restrictions against them,” CFO Kim added.
Meanwhile, the chipmaker celebrated its record performance by rewarding its staff with the company's largest-ever incentive bonus, equivalent to about 75 percent of a full year's pay.
