On January 23, 2025, SK Hynix Inc. reported a significant increase in its quarterly profit, with operating profit soaring to 8.08 trillion won ($5.6 billion). Despite these record results, the company’s shares fell over 2% as investors expressed concerns about stagnant smartphone demand and uncertainties surrounding AI spending in 2025.
- SK Hynix shares fell despite record profits.
- Smartphone demand remains stagnant for SK Hynix.
- HBM sales expected to double this year.
- AI-driven datacenter spending is increasing.
- Samsung plans to catch up with HBM4.
- SK Hynix invests $15 billion in chip production.
The South Korean semiconductor manufacturer, a key supplier for Nvidia, has seen its stock rally 30% this year but faced profit-taking after the earnings announcement.
SK Hynix’s impressive growth highlights the ongoing global boom in datacenter spending, particularly in high-bandwidth memory (HBM) chips essential for AI applications. The company is positioned to benefit from the recent announcement of a $100 billion venture, known as the Stargate project, aimed at building datacenters. This initiative has sparked optimism among investors regarding increased construction in the sector.
Key details from SK Hynix’s performance include:
- Operating profit increased more than 20-fold year-over-year.
- HBM accounted for 40% of overall DRAM chip revenue.
- The company expects HBM sales to more than double in 2025.
To maintain its competitive edge, SK Hynix is accelerating the development of its next-generation HBM4 chips, which are expected to ship in the second half of 2026. The company has committed to investing approximately $15 billion in South Korea to meet the growing demand for high-end chips and is also developing an advanced packaging plant in Indiana for AI products.
While smartphone demand remains weak, SK Hynix anticipates growth in sales of AI-equipped PCs and devices, potentially leading to a recovery in the second half of the year. Analysts predict that AI demand could offset declines in traditional memory markets, positioning SK Hynix favorably in the evolving tech landscape.
In summary, SK Hynix’s record profit underscores its pivotal role in the semiconductor industry, particularly in the AI sector. Despite a recent dip in stock prices, the company’s strategic investments and anticipated growth in HBM sales suggest a positive outlook for the future.
