Hynix logs fastest sales growth since 2010

SK Hynix said it expects a full recovery in the memory market after artificial intelligence (AI) demand spurred the chip maker to log its fastest pace of revenue expansion since at least 2010.

Sales at the world’s secondbiggest maker of memory more than doubled to a better-thanexpected 12.4 trillion won (HK$70.6 billion) in the March quarter.

Operating income was 2.89 trillion won, beating estimates for a profit of 1.8 trillion won. It was the firm’s second-highest first-quarter operating profit on record.

Hynix said it had entered a rebound phase, with the overall memory market on a steady growth path. Capital spending this year would be “somewhat” higher than planned, it said.

The company planned to increase the supply of its leadingedge HBM3E chips and take on more customers, it said in an earnings release yesterday.

“This is a clear turnaround and the start of a record-breaking year for Hynix,” said Tom Kang, director at Counterpoint Research, adding he expected the firm to hit revenue of almost 61 trillion won and a profit margin of more than 20 per cent this year.

Hynix’s HBM capacity was fully booked for this year and the company needed new factories to keep up with the demand, he said.

The South Korean firm is reporting days after Texas Instruments gave a bullish revenue forecast for the current quarter, indicating a slump in demand for industrial and automotive components might be easing.

Bigger rival Samsung Electronics’ preliminary operating profit showed a sharp rebound in the first quarter, while Micron Technology last month also gave a strong sales forecast.

Hynix, which in December became South Korea’s secondmost valuable company, is the leader in the high-bandwidth memory that works alongside Nvidia’s AI accelerators.

Earlier this week, the company announced a plan to invest some US$15 billion in South Korea to meet rapidly growing demand for such high-end chips, which it expected to grow by 60 per cent per year.

That spending underscores how it is locked in a global race to supply components essential to creating generative AI services.