Seoul: South Korean chipmaking giant SK hynix Inc. announced that its fourth-quarter earnings reached an unprecedented high, driven by the soaring demand for artificial intelligence (AI) chips, including high bandwidth memory (HBM), significantly surpassing market expectations. The company also reported record-breaking revenues and operating profits for 2024.
According to Yonhap News Agency, SK hynix, the world's second-largest memory chipmaker, revealed in a regulatory filing that its net income for the fourth quarter rose to 8 trillion won (US$5.6 billion), a turnaround from a loss of 1.37 trillion won in the previous year. The company's operating income for the October-December period increased more than 20-fold to 8.08 trillion won from 346 billion won a year earlier, while sales increased by 74.8 percent year-on-year to 19.76 trillion won. These figures exceeded market expectations, with analysts predicting an average net profit of 5.99 trillion won, based on a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
SK hynix attributed its strong performance to the rising demand for AI memory, which has reinforced its position as a leader in HBM technology. For the entire year of 2024, the company reported a net income of 19.79 trillion won, reversing a loss of 9.13 trillion won from the previous year. Operating income also reached a record 23.46 trillion won, compared to a loss of 7.73 trillion won in 2023. The previous record of 20.8 trillion won was set in 2018 during a semiconductor boom. Annual revenue surged by 102 percent to 66.19 trillion won, surpassing the previous record of 44 trillion won in 2022.
The company highlighted that HBM sales continued to grow rapidly in the fourth quarter, accounting for over 40 percent of its total DRAM revenue. Steady demand for enterprise solid state drives (SSD) also contributed to the robust sales. SK hynix has been at the forefront of the rapidly growing HBM industry, propelled by the generative AI boom. The company began providing eight-layer HBM3E chips to U.S. AI giant Nvidia Corp. in March and started mass-producing the most advanced 12-layer HBM3E chips in September, becoming the first in the world to do so.
SK hynix emphasized the importance of timely product supply to meet customer needs, indicating the transformation of the memory sector into a high-performance, high-quality market driven by AI memory demand. The company's cash equivalent increased by 5.2 trillion won to 14.2 trillion won by the end of 2024, while its debt decreased by 6.8 trillion won to 22.7 trillion won over the one-year period.
Looking ahead, SK hynix forecasted continued demand for HBM and high-density server DRAM, essential for high-performance computing, throughout 2025. This expectation is based on growing investments in AI servers by global big tech companies and the rising importance of AI inference technology. For the consumer market, which remains relatively sluggish, the sales of personal computers and smartphones equipped with AI are anticipated to expand in the second half.
To meet customer demands, SK hynix plans to expand HBM3E supply and develop HBM4 at the appropriate time. In November, the company announced its development of 16-layer HBM3E chips and plans to mass-produce the sixth-generation HBM4 in the second half of 2025. Additionally, SK hynix will transition to advanced production processes for its well-selling DRAM memories, including DDR5 and LPDDR5.
SK hynix also increased its annual fixed dividend by 25 percent to 1,500 won per share from 1,200 won, raising the total cash dividend amount to 1 trillion won annually. Kim Woo-hyun, Chief Financial Officer at SK hynix, stated that the company has built strong fundamentals to achieve sustainable revenues and profits, even during market corrections, by significantly increasing its portfolio of high-value-added products. SK hynix remains committed to maintaining profitability and will make flexible investment decisions in line with market conditions.