SK Hynix: Fiscal 3Q24 Financial Results

• Achieving best-ever quarterly performance with increasing premium product sales based on ≠1 AI Memory technology
• Strong demand of memory for AI servers – HBM’s share of DRAM revenues in 3Q24 marks 30% and forecast to be 40% in Q4
• Company to lead the global AI memory market again next year promoting long-term growth by securing both business stability and profitability

SK hynix Inc. recorded 17.5731 trillion won in revenues, 7.03 trillion won in operating profit (with an operating margin of 40%), and 5.7534 trillion won in net profit (with a net margin of 33%) in 3Q24.

3Q24 revenue marked all-time high, exceeding the previous record of 16.4233 trillion won in 2Q24 of this year by more than 1 trillion won. Operating profit and net profit also far exceeded the record of 6.4724 trillion won and 4.6922 trillion won in 3Q24 during the semiconductor super boom.

The company emphasized that the demand for AI memory continued to be strong centered on data center customers, and the company marked its highest revenue since its foundation by expanding sales of premium products such as HBM and eSSD. In particular, HBM sales showed excellent growth, up more than 70% from 2Q24 and more than 330% from 3Q23.

As sales increased mainly on highly profitable premium products, the ASP of both DRAM and NAND rose in the mid 10% range compared to the previous quarter, which made the company mark the highest operating profit.

While the demand of memory for AI servers such as HBM and eSSD has grown noticeably this year, the company predicts that this trend will continue next year. This is because generative AI is developing into a multi-modal1 form and global big tech companies continue to invest to develop artificial general intelligence (AGI) (2).

(1) Multi-modal: AI service that can understand multiple complex information such as text, photos, voice, video, etc.

(2) Artificial General Intelligence: AI that implements human-like or higher intelligence with a computer

The firm also forecasts that the PC and mobile product markets, which had been slow to recover demand compared to memory for AI servers, will be on a steady growth path as well next year as AI memories optimized for each device are released.

As a result, the company will continue to focus on profitability by increasing sales centered on high value-added products based on its world-leading technology in AI memory.

In the DRAM area, the vendor is continuing the rapid transition from existing HBM3 to 8-layer HBM3E products. It also plans to start supplying 12-layer HBM3E products, which were mass-produced last month, in 4Q24 as scheduled. This makes HBM sales, which accounted for 30% of total DRAM revenues in the third quarter, expected to reach 40% in 4Q24.

For NAND, the company plans to expand sales of high-capacity eSSD, which is rapidly increasing market demand, while focusing on investment efficiency and production optimization.

“SK hynix has solidified its position as the world’s No.1 AI memory company by achieving the highest business performance ever in the third quarter of this year,” said Kim Woohyun, VP and CFO. “We will continue to maximize profitability while securing stable revenues by taking flexible product and supply strategies in line with market demand.“