AI Surge Drives SK Hynix Profit Over Five-Fold

SK Hynix reported a remarkable first-quarter operating profit increase, exceeding a five-fold jump to reach a new record high. This surge is primarily attributed to the booming artificial intelligence sector, which has significantly boosted demand for both high-end and conventional memory chip products. The company noted that AI's evolution, from large model training to real-time inference, is expanding the foundation for memory demand across DRAM and NAND flash technologies.

Market data shows substantial price increases for memory chips, with certain DRAM chips rising nearly 83% and some NAND products soaring around 160% in the first quarter. Analysts anticipate further price increases in the current quarter, driven by the ongoing race among AI firms to secure advanced chips for infrastructure development. SK Hynix predicts a favorable pricing environment will continue, as AI-driven demand compensates for softer consumer electronics markets.

To address this escalating demand, SK Hynix is accelerating capacity expansion, including an expedited opening of a new plant in South Korea. Significant investments are planned for infrastructure at the Yongin Cluster and the M15X fab, alongside securing key equipment like EUVs. The company also indicated it is actively reviewing additional shareholder return measures, such as dividends and share buybacks.

SK Hynix's financial performance has translated into significant market gains, with its shares nearly doubling year-to-date, elevating its market value to approximately $590 billion. This valuation surpasses that of chip equipment maker ASML, making SK Hynix Europe's most valuable company. The company's first-quarter revenue rose by an impressive 198% to 52.6 trillion won.