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Chipmaker SK Hynix Overtakes Samsung in Quarterly Profit
Chipmaker SK Hynix overtook its larger rival Samsung on quarterly profit for the first time, with its lead in advanced memory chips producing robust sales that it expects to double this year as a boom in artificial intelligence data centers continues.
Strong Results and Forecast
Operating profit at SK Hynix jumped more than 20-fold year on year to Won8.1tn ($5.6bn) in the final three months of 2024, exceeding Samsung’s estimated operating profit of Won6.5tn, as sales jumped 75 per cent to Won19.8tn. SK Hynix on Thursday forecast demand for its high-bandwidth memory (HBM) products to continue increasing due to surging investment in AI servers and the growing importance of processing-intensive "inference" in which models generate predictions from data.
HBM Chip Sales to Double
HBM chips accounted for 40 per cent of SK Hynix’s total Dram chip revenue in the fourth quarter. The main supplier of such chips to Nvidia forecast HBM sales would more than double this year. It began to supply its most advanced 12-layer HBM3E chips in the fourth quarter and plans to ship next-generation 16-layer HBM4 chips in the second half of next year.
Analysts’ Views
"We expect continued growth in SK Hynix earnings this year as AI spending is likely to continue to increase, fuelling HBM demand," said Kwak Min-jung, an analyst at Hyundai Motor Securities. "The strong results highlight that HBM chips remain highly profitable, with Samsung yet to supply the chips to Nvidia," said Albert Yong, managing partner at Seoul-based hedge fund Petra Capital Management.
Conclusion
SK Hynix’s strong results and forecast have highlighted the company’s lead in advanced memory chips, particularly HBM, which is driving demand from AI data centers. The company’s shares fell 1.1 per cent on Thursday as investors took profits, but analysts remain optimistic about its earnings growth this year.
FAQs
Q: Why did SK Hynix overtake Samsung in quarterly profit?
A: SK Hynix’s lead in advanced memory chips, particularly HBM, produced robust sales that exceeded Samsung’s estimated operating profit.
Q: What is the forecast for HBM chip sales?
A: SK Hynix forecast HBM sales to more than double this year due to surging investment in AI servers and the growing importance of processing-intensive "inference".
Q: What is the impact of SK Hynix’s strong results on Samsung?
A: Samsung’s shares fell 0.5 per cent so far this year on continued concern over its technological edge, with analysts saying it will take a long time for Samsung to catch up with SK Hynix in the HBM segment.
