By Kwanwoo Jun


SK Hynix said it expects an overall recovery in the memory-chip market this year as it swung to a net profit after five straight quarters of losses, continuing to ride the artificial-intelligence boom fueling demand for advanced and high-end memory chips.

The upbeat results come as the world's second-largest memory-chip maker, a main supplier of high-bandwidth memory chips for Nvidia's graphics-processing units that power AI systems, is ramping up global production capacity to meet growing demand for advanced AI chips.

The South Korean memory-chip maker on Thursday posted net profit of 1.917 trillion won ($1.39 billion) for the first quarter, compared with net loss of KRW2.585 trillion a year earlier, far exceeding analysts' expectations.

Revenue more than doubled to a record KRW12.43 trillion, while operating profit came in at KRW2.886 trillion.

The company attributed the strong quarterly results to increased sales of its HBM and other advanced chips for AI data servers.

SK Hynix said its NAND-chip business swung to profit on brisk sales of premium products amid higher prices in the first quarter. Its DRAM chip business had a turnaround in 2023.

The company said it expects the overall memory-chip market to be on a steady growth path as demand for AI chips continues to rise.

The HBM market leader's market capitalization double in the past year to nearly $100 billion. Shares have risen more than 20% this year as investors bet on the AI frenzy that has been pulling the semiconductor industry out of a long slump.

To meet the growing demand for advanced memory chips, SK Hynix plans to spend an additional $14.56 billion to expand its semiconductor production capacity in South Korea. About a quarter of that investment is earmarked for a new chip-fabrication plant, and construction is expected to be completed by November 2025.

The Korean company is also expanding in the U.S., with plans to build a $3.87 billion AI chip-packaging facility in Indiana. It is also partnering with Taiwan's TSMC, the world's largest contract chip maker, to develop new HBM4 products.


Write to Kwanwoo Jun at kwanwoo.jun@wsj.com


(END) Dow Jones Newswires

04-24-24 2240ET