SK hynix posts 1,200 pct net profit boost on AI chip boom

SEOUL

South Korea's SK hynix said July 29 second-quarter net profit soared a whopping 1,242 percent year-on-year, driven by the artificial intelligence industry's explosive demand for its advanced memory chips.

SK hynix is a specialist supplier of high-bandwidth memory chips to U.S. industry behemoth Nvidia, and a pillar of South Korea's tech-led economy.

The global race to build data centers hosting AI infrastructure has seen a meteoric rise in the firm's fortunes, despite concern the sector may be overvalued in a market bubble.

Yesterday's earnings figures, including quarterly net profit of 94 trillion won ($64 billion), were described in a statement by the Icheon-headquartered firm as "an all-time high quarterly performance."

"We are aware of concerns that AI infrastructure investment might be slowing down," marketing chief of the AI microchip division Park Joon-deok said on a call with investors and reporters.

He cited jitters over firms exploring data center rental, rather than construction, and the emergence of new high-efficiency AI requiring a lower memory taskload.

"We view these developments not as a scaling back of AI investment, but rather as a process of maximizing the utilization of the massive AI infrastructure built to date and accelerating its monetisation," he said.

Yesterday’s report said operating profit between April and June jumped 557 percent from last year to 60 trillion won.

Revenue stood at 79 trillion won, with the differential to the net profit boosted by SK hynix's one-off sale of its 20 trillion won stake in flash memory maker Kioxia -- another beneficiary of the AI boom.

SK hynix said it intends to make investments in the 40 trillion won range this year.