Seoul (AFP) – South Korean chip giant SK hynix said on Wednesday its operating profit doubled last year to a record high after a surge in global demand for technology powering artificial intelligence. SK hynix and rival Samsung are among the world’s leading producers of memory chips, supplying high-performance components that are essential for AI products and the data centers powering the fast-evolving sector.
It said in a statement that “2025 marked a year in which the company once again demonstrated its world-class technological leadership.” The firm reported that its operating profit soared 101 percent to 47.2 trillion won ($33 billion) last year. Net profit came to 42.9 trillion won, up 117 percent from 2024. Sales for 2025 stood at 97.1 trillion won, up 47 percent from the previous year.
The AI boom has pushed up prices and shipments of conventional NAND and DRAM memory semiconductors, while demand for high-bandwidth memory (HBM) chips, used in AI servers, has soared. This surge in demand has helped SK hynix’s shares soar around 220 percent over the past six months. Fourth-quarter net profit reached 15.24 trillion won, marking a 90.4 percent year-on-year increase.
SK hynix “plans to further strengthen its proven quality, technological leadership, and mass-production capabilities” by “stably supplying both HBM3E and HBM4” chips. The company also announced plans to establish an “AI solutions firm” in the United States, committing $10 billion, and is considering investments in innovative U.S. companies.
AI power is a crucial aspect of this growth. TrendForce memory analyst Ellie Wang noted that HBM chips are essential for advanced processors used in AI systems. “For Samsung and SK hynix, while AI has driven a meaningful increase in memory demand, the technical barriers for HBM have also risen,” she told AFP. “How capacity is allocated across different products has become an increasingly critical issue” for the companies, she added, mentioning that current memory chip supply tightness is partly due to suppliers concentrating production lines on HBM.
The enormous demand for memory chips in AI systems has resulted in a shortage of those used in consumer electronics, threatening higher prices for phones, laptops, and other devices. “As HBM’s share of total production continues to rise, supply shortages are difficult to alleviate,” Wang said. TrendForce predicts that memory chip industry revenue will surge to a global peak of more than $840 billion in 2027.
In a bid to enhance its position in the AI landscape, South Korea has announced it will triple spending on artificial intelligence this year, aiming to join the United States and China as one of the top three AI powers.
© 2024 AFP
