SK Hynix profits double on memory chip stockpiling ahead of US tariffs

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Chipmaker SK Hynix’s quarterly working revenue has greater than doubled on robust gross sales of superior memory chips utilized in synthetic intelligence merchandise, amid stockpiling ahead of looming US tariffs.

Analysts stated SK Hynix toppled arch-rival Samsung Electronics because the world’s greatest dynamic random-access memory (Dram) chipmaker for the primary time in the course of the first quarter.

Working revenue rose 158 per cent to Won7.44tn ($5.2bn) within the first three months of this 12 months, a lot larger than the Won6.6tn forecast by analysts polled by Bloomberg.

Gross sales elevated 42 per cent 12 months on 12 months to Won17.6tn. The robust earnings had been pushed by sturdy gross sales of excessive bandwidth memory (HBM) chips utilized in AI {hardware}.

However the chipmaker warned of attainable demand volatility within the second half as a result of macroeconomic uncertainties whereas stressing that HBM demand can be much less affected by potential US tariffs on semiconductors.  

“Demand uncertainty will enhance as a result of of tariff coverage modifications and different restrictions, however that is expediting demand for IT client items as some shoppers rush to purchase merchandise earlier than costs rise,” Kyu Hyun Kim, head of Dram advertising and marketing, instructed analysts on Thursday.

SK Hynix, a fundamental HBM provider to Nvidia, captured 36 per cent of the Dram market within the January-March interval, adopted by Samsung at 34 per cent, in response to Counterpoint Analysis. Dram is essentially the most extensively used memory chip in PCs and servers to assist course of knowledge. HBMs are made by stacking Dram chips.

“The modified dynamics will most likely proceed in the interim as Samsung finds it troublesome to meet up with SK Hynix in HBM,” stated Daniel Kim, an analyst at Macquarie. “AI and HBM are fast-changing markets. It isn’t straightforward for Samsung to catch up as a latecomer.”

SK Hynix widened its lead in HBM, with a 70 per cent market share within the first quarter, Counterpoint Analysis stated. Its HBM market share will stay above 50 per cent this 12 months, with Samsung’s share falling to under 30 per cent and US rival Micron Know-how’s share rising to nearly 20 per cent, in response to market researcher TrendForce.

The corporate expects Huge Tech to keep up its spending on server chips to compete in AI, whereas new AI options in smartphones will gas substitute demand, rising gross sales of high-performance cellular Dram chips. SK Hynix nonetheless expects HBM demand to double this 12 months.

Its shares fell 0.8 per cent on Thursday morning as quick promoting of its inventory surged to a file excessive of Won1.5tn up to now this month, in response to Bloomberg knowledge, with the business dealing with rising uncertainties from looming US tariffs and Washington’s harder export controls on China, in addition to rising international recession fears.

International buyers offered a internet Won2.8tn of the corporate’s shares this month, after the inventory value greater than doubled over the previous two years, pushed by the AI growth. The shares have fallen a couple of fifth from a January excessive.

“Earnings season received’t matter with bigger forces at work,” Morgan Stanley analysts stated in a analysis observe. “The true tariff influence on memory resembles an iceberg, with extra hazard unseen under the floor and nonetheless approaching.”

President Donald Trump has stated tariffs on chip imports would start “very quickly”. The US has additionally imposed particular licensing necessities on Nvidia promoting its H20 chips to Chinese language prospects, with the US chipmaker recording a $5.5bn earnings hit this month consequently.

“This could have an effect on Hynix’s earnings, however the influence will most likely be restricted, given the availability scarcity of high-end HBM chips,” stated Macquarie’s Kim. “Optimistic momentum is predicted for the corporate this 12 months and subsequent until the worldwide economic system slips into recession.”