SK Hynix has reported 125 percent increase in revenue and a 25 percent rise in profit margin for the second quarter of 2024.
The company’s financial results for this period include:
Revenue: 16.4233 trillion won
Operating Profit: 5.4685 trillion won (33 percent operating margin)
Net Profit: 4.12 trillion won (25 percent net margin)
These figures represent all-time highs for SK Hynix, surpassing the previous revenue record of 13.811 trillion won in Q2 2022. Operating profit also saw a significant increase, reaching the 5 trillion won mark for the first time in six years since the semiconductor boom of 2018.
Key Drivers of Growth
Rising Prices of DRAM and NAND Products:
The increased demand for AI memory, particularly High Bandwidth Memory (HBM), led to a 32 percent revenue increase compared to the previous quarter.
Premium product sales and favorable exchange rates also contributed to the rise in operating profit ratio by 10 percentage points from the previous quarter.
DRAM Business:
Focus on high-value-added products such as HBM3E and DRAM for servers, which began mass production in March.
HBM sales surged by over 80 percent from the previous quarter and over 250 percent year-on-year.
NAND Business:
Significant growth in eSSD and mobile product sales, with eSSD sales increasing by about 50 percent from Q1.
Continued rise in the average selling price of NAND products since Q4 2023, leading to profitability for two consecutive quarters.
Future Outlook and Plans
AI Server Memory Demand:
SK Hynix anticipates continued demand growth for AI server memory in the second half of the year.
The release of new PC and mobile products supporting On-Device AI is expected to boost sales of high-performance memory products.
Leadership in HBM Market:
Plans to produce 12-layer HBM3E products in Q3.
Launch of 32Gb DDR5 DRAM for servers and MCRDIMM1 for high-performance computing in H2 to maintain competitive advantage.
Expansion in NAND Market:
Expansion of high-capacity eSSD sales with 60TB products expected to lead the market.
Anticipation of eSSD sales more than quadrupling compared to last year.
Infrastructure Developments:
Ongoing construction of the Cheongju M15X plant, with mass production set to begin in H2 next year.
Planned construction of the first fab of the Yongin semiconductor cluster starting in March next year, with completion targeted for May 2027.
Financial Strategy
Despite potential increases in yearly capital expenditures (CAPEX), SK Hynix aims to maintain financial stability by aligning investments with customer demand and profitability. The company reduced borrowings by 4.3 trillion won in Q2 while making essential investments.
SK Hynix Chief Financial Officer Kim Woohyun stated, “The company will solidify its position as a leader in AI memory products by focusing on developing the best process technology and high-performance products based on a stable financial structure.”
