SK hynix posts record revenues and profits as AI industry drives surge in HBM3 and HBM3E demand

SK hynix this week posted record earnings, operating profits, and net income for 2024. The company managed to more than double its revenue and return to profitability mainly due to increased demand for premium types of dynamic random access memory (DRAM) such as HBM3/HBM3E as well as enterprise-grade SSDs.

SK hynix earned ₩66.193 trillion in revenue ($46.054 billion), ₩23.467 trillion in operating profit ($16.327 billion), and ₩19.797 trillion ($13.776 billion) net profit for the whole of 2024. That compares to ₩32.765 trillion in revenue ($22.8 billion) and a net loss of ₩9.138 trillion ($6.36 billion) in 2023. The company’s operating margin was 35% in 2024, up from -24% in 2023. Although the company’s revenue climb slowed in the fourth quarter, which is in line with seasonality and dropping 3D NAND prices, SK hynix operating margin still increased during the quarter as it ramped up production of premium HBM3E memory.

The company attributes its success to increased sales of AI memory products, including HBM3 and HBM3E for the latest accelerators like Nvidia’s H100, H200, and B100/B200 as well as enterprise-grade solid-state drives that are used for AI training and inference systems. High-end AI servers tend to also contain a lot of memory, so while SK hynix did not explicitly mention high-density server-grade DDR5 chips and modules, they clearly played a role in its great results.

“With significantly increased portion of high value-added products, SK hynix has built fundamental to achieve sustainable revenues and profits even in times of market correction.” said Kim Woohyun, Vice President and Chief Financial Officer (CFO) at SK hynix. “While maintaining the profitability-first commitment, the company will make flexible investment decisions in line with market situation.”

Looking ahead, SK hynix expects continued growth in AI-driven markets, fueled by global investments in AI servers for training and inference. While the consumer market — client PCs and smartphones — is expected to slow down, AI-equipped devices will drive growth in the second half of the year.

To meet this demand, SK hynix will increase HBM3E supply, develop HBM4, and transition to advanced processes for DDR5 and LPDDR5 production. For 3D NAND flash memory, the company will prioritize profitability and flexible sales strategies.