South Korea’s SK hynix said on Wednesday that second-quarter net profit soared 1,242% year-on-year, driven by the artificial intelligence industry’s surging demand for its advanced memory chips. <\/p>\n
Despite the record result, its shares closed 9.6% lower in Seoul after revenue and operating profit missed market expectations. <\/p>\n
The company is a key supplier of high-bandwidth memory chips to US technology giant Nvidia and a pillar of South Korea’s tech-led economy. <\/p>\n
The global race to build data centres housing AI infrastructure has helped the firm grow significantly, despite concerns that the sector may be overvalued and in a market bubble. <\/p>\n
Wednesday’s earnings figures, including quarterly net profit of 93.9tn won (\u20ac56.9 billion), were described by the Icheon-based firm as “an all-time high quarterly performance”. <\/p>\n
“We are aware of concerns that AI infrastructure investment might be slowing down,” Park Joon-deok, marketing chief of the AI microchip division, said on a call with investors and reporters. <\/p>\n
Related <\/p>\n
He cited jitters over firms renting data-centre capacity rather than building their own facilities, as well as the emergence of new, more efficient AI models that require lower memory workloads. <\/p>\n
“We view these developments not as a scaling back of AI investment, but rather as a process of maximising the utilisation of the massive AI infrastructure built to date and accelerating its monetisation,” he said. <\/p>\n
Operating profit between April and June jumped 557% from last year to 60.5tn won (\u20ac36.6bn). <\/p>\n
Revenue stood at 79.3tn won (\u20ac48bn), with net profit boosted by a one-off gain from the sale of part of SK hynix’s stake in Japanese flash-memory maker Kioxia, another beneficiary of the AI boom. <\/p>\n
SK hynix said it intends to make investments in the 40tn won (\u20ac24.2bn)range this year. <\/p>\n
Growth was attributed to expanding investments in AI infrastructure as the technology evolves into more complex forms requiring greater high-bandwidth memory capacity. <\/p>\n
“With major tech companies increasing their AI infrastructure investments, additional supply requests continue to mount,” the company said in a statement. <\/p>\n
“As these investments are supported by revenue generated from AI services, the momentum in memory demand is expected to persist.” <\/p>\n
SK hynix eyes major US listing <\/p>\n
Parent conglomerate SK Group announced on Saturday plans for a new $500bn (\u20ac438.6bn) collaboration with Nvidia to invest in AI infrastructure. <\/p>\n
Earlier this month, SK hynix also raised $26.5bn (\u20ac22.8bn) through a US offering of American depositary receipts, one of the world’s largest-ever equity offerings. <\/p>\n
Despite aggressive investments, shares in SK hynix and its larger South Korean rival Samsung Electronics had fallen sharply by 33% and 41% respectively over the month to Tuesday. <\/p>\n
SK hynix shares tumbled 14% on Tuesday, the day before the earnings release, and closed a further 9.6% lower on Wednesday after its operating profit and revenue fell short of market expectations. <\/p>\n
The earlier decline was attributed to concerns about the sustainability of the AI industry and conflict in the Middle East spooking investors, KB Securities analyst Kim Dong-won said in a note on Monday. <\/p>\n
Nonetheless, Kim forecast that memory chip prices were likely to rise “at least 30% in the third quarter”, with supply shortages likely to persist until 2028. <\/p>\n
Samsung Electronics is due to report its quarterly earnings on Thursday. The company has forecast that its second-quarter operating profit will rise about 1,800% from a year earlier. <\/p>\n","protected":false},"excerpt":{"rendered":"South Korea’s SK hynix said on Wednesday that second-quarter net profit soared 1,242% year-on-year, driven by the artificial…\n","protected":false},"author":2,"featured_media":549473,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[365,363,364,177311,83355,111,139,69,78163,68538,4790,145],"class_list":["post-549472","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-market-expectations","tag-net-profit","tag-new-zealand","tag-newzealand","tag-nz","tag-operating-profit","tag-sk-hynix","tag-south-korea","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/549472","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=549472"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/549472\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/549473"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=549472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=549472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=549472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}