By Heekyong Yang and Hyunjoo Jin SEOUL, Jan 28 (Reuters) – South Korea's SK Hynix on Wednesday booked quarterly profit that more than doubled to a record, trouncing forecasts, and predicted that the boom in artificial intelligence would continue to spur explosive growth in memory chip demand. The earnings beat plus the announcement of its biggest share cancellation to date helped propel shares in the Nvidia supplier 9% higher in after-hours trading. Insatiable thirst for AI has lifted prices for both advanced and conventional memory chips, and SK Hynix logged a 137% surge in operating profit to 19.2 trillion won ($13.5 billion) for the fourth quarter. That easily beat a LSEG SmartEstimate prediction of 17.7 trillion won. The company has managed to carve out an enviable lead in high bandwidth memory (HBM) used in artificial intelligence chipsets designed by the likes of Nvidia, commanding a 61% share of the HBM market, according to Macquarie Equity Research. Its HBM sales more than doubled in the fourth quarter from a year earlier and mass production of its next-generation HBM chips is progressing as planned. SK Hynix is also benefiting as rising AI demand pushes up prices for commodity DRAM and NAND chips used in servers, personal computers and mobile devices. For example, contract prices for 16 gigabyte DDR5, a popular type of DRAM chip, more than quadrupled last quarter from a year earlier, according to market tracker TrendForce. TrendForce expects conventional DRAM contract prices to rise a further 55% to 60% in the current quarter from the previous one. SK Hynix said it expects orders for memory chips used in PCs and smartphones to lag overall market growth due to rising prices and tight supply. Analysts have said that chipmakers are prioritising sales to companies building out AI data centres. Shares of SK Hynix have risen some 30% for the year to date. It announced it would cancel 15.3 million Treasury shares, worth about 12.2 trillion won and equivalent to 2.1% of total shares outstanding. This year is expected to be somewhat more challenging for the company. Macquarie Equity Research has estimated its HBM market share falling to 53% in 2026 as rival Samsung Electronics makes progress in closing the gap. Samsung plans to start production of its next-generation HBM chips next month and supply them to Nvidia, Reuters reported on Monday. SK Hynix will hold a briefing on its fourth-quarter earnings results on Thursday. ($1 = 1,422.2400 won) (Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Miyoung Kim and Edwina Gibbs)
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