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Nvidia Corp.’s main supplier of high-bandwidth memory posted an operating profit of 8.08 trillion won ($5.6 billion) in the December quarter, in line with analysts’ estimates, after a 75% rise in revenue. The company also boosted its annual dividend by 25% to 1,500 won a share.
The results underscore how SK Hynix remains at the forefront in the HBM that Nvidia accelerators need to train AI — at the expense of longtime rival Samsung Electronics Co. It may help assuage concerns that a global AI-fueled datacenter spending spree by Big Tech companies such as Microsoft Corp. and Meta Platforms Inc. has peaked.
Still, there’re encouraging signs of longer-term demand for AI infrastructure. SoftBank Group Corp., OpenAI, Oracle Corp. and Abu Dhabi-backed MGX plan to set up a $100 billion venture to bankroll and build datacenters. That news, boosted by President Donald Trump, fueled a rally in AI players from Nvidia to Arm Holdings Plc.
SK Hynix remains one of the main beneficiaries of a race to supply components essential to creating ChatGPT-like generative AI services. Well ahead of Samsung and Micron Technology Inc. in designing and supplying HBM, SK Hynix saw its shares climb almost 30% just this month, extending a 20%-plus gain in 2024.
HBM made up 40% of its overall DRAM chip revenue in the quarter. Demand for such high-end memory will continue to increase as investment in AI servers grow and inference — making predictions from data — grows in importance, the company predicted. While the Korean firm expects inventory adjustments in the consumer market, sales of PCs and smartphones equipped with AI features will expand, fueling a second-half pickup, it said.
On Wednesday, Samsung unveiled its latest Galaxy S25 marquee, promising improved AI capabilities.
SK Group Chairman Chey Tae-won told reporters at CES in Las Vegas that SK Hynix has quickened its pace of development to keep up with Nvidia’s demands. During that trip, he met Nvidia co-founder Jensen Huang to discuss ways to deepen their relationship.
The Korean company said in November it’s on track to supply customers with HBM4 in the second half of 2025, reaffirming a timeline first offered on a post-earnings call in October.
Samsung has also said it plans to mass-produce HBM4 chips in the second half of 2025, seeking to catch up to its smaller rival with the more advanced products.
Still, SK Hynix’s recent stock rally means it’s now trading at a price-to-book ratio of roughly 2.8, above its three-year average of 1.6.
And whether SK Hynix can indeed deliver the next-generation AI memory in 2025 hinges on Nvidia’s complex qualification process, although Chey expressed confidence on that front.
