HBM Sales Skyrocket 330% in Semiconductor Leaders Report

• Consolidated revenue was 17.5731 trillion KRW, operating profit was 7.03 trillion KRW, and net profit was 5.7534 trillion KRW… Quarterly results reached a record high.
• Leveraging the company’s global leadership in AI-oriented memory technology, SK Hynix expanded the sales of high-value-added products, achieving its largest-ever quarterly performance.
• The demand for memory for AI servers remained strong, with HBM accounting for 30% of total DRAM sales in the third quarter and expected to reach 40% in the fourth quarter.
• “The company will continue to lead the AI-oriented memory market next year… ensuring business stability and profitability to lay the foundation for long-term development.”

On October 24, 2024, SK Hynix released its financial report for the third quarter of fiscal year 2024, ending September 30, 2024. Consolidated revenue for the third quarter of fiscal year 2024 was 17.5731 trillion KRW, with an operating profit of 7.03 trillion KRW and a net profit of 5.7534 trillion KRW. The operating profit margin for the third quarter of fiscal year 2024 was 40%, and the net profit margin was 33%.

The company’s quarterly results reached a historic high, with quarterly revenue surpassing that of the second quarter of 2024, which stood at 16.4233 trillion KRW, by more than 1 trillion KRW. Operating profit and net profit also significantly exceeded the record set in the third quarter of 2018, during the semiconductor boom (operating profit of 6.4724 trillion KRW, net profit of 4.6922 trillion KRW).

SK Hynix stated, “Demand for AI-oriented memory, primarily from data center customers, remained robust, and the company responded to this trend by expanding sales of high-value-added products like HBM and eSSD (enterprise solid-state drives), achieving the largest quarterly revenue since the company’s establishment. In particular, HBM sales saw a significant increase, with a 70% quarter-on-quarter and 330% year-on-year growth.”

The company also explained, “Sales primarily consisted of high-value-added products with high profitability, while the average selling price (ASP) of both DRAM and NAND flash products increased by more than 10% quarter-on-quarter, resulting in a record-high operating profit this quarter.”

This year, there has been a noticeable increase in demand for AI-oriented memory such as HBM and eSSD. The company anticipates that this growth trend will continue next year, as generative AI develops in a multi-modal* form and global tech giants continue investing in the research and development of Artificial General Intelligence (AGI)**.

The company also predicts that compared to the relatively slow recovery in the PC and mobile product markets, demand for AI-oriented memory optimized for various end devices will gradually bring about a supply-demand balance next year, leading to stable growth.

SK Hynix will continue to leverage its global leadership in AI-oriented memory technology, implementing a strategy of expanding sales of high-value-added products and ensuring profitability.

In terms of DRAM, the company is quickly transitioning from existing HBM3 to 8-layer HBM3E products, and the 12-layer HBM3E product, which began mass production last month, is set to be shipped as planned in the fourth quarter of this year. As a result, HBM’s share of total DRAM sales, which stood at 30% in the third quarter, is expected to reach 40% in the fourth quarter of this year.

In the NAND flash sector, the company is focusing on investment efficiency and production optimization while expanding sales of high-capacity eSSD products, for which market demand is rapidly increasing.

Kim Woo-hyun, Vice President and CFO of SK Hynix, stated, “SK Hynix achieved the largest quarterly performance since its establishment in the third quarter of this year, solidifying its position as a leading company in the AI-oriented memory market. The company will implement a flexible product and supply strategy based on market demand, ensuring stable revenue while maximizing profitability.”

• Multi-Modal: AI services capable of understanding complex information such as text, images, audio, and video.
• Artificial General Intelligence (AGI): Artificial intelligence with human-level or higher intelligence capabilities achieved through computing.

Source: TrendForce

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