The operating profit of component manufacturer SK hynix skyrocketed by 734 percent in the previous quarter, marking a significant milestone for the company. The remarkable increase has been largely attributed to the surge in demand for AI applications from customers. As outlined in SK hynix's presentation of its quarterly figures, the company emphasizes the importance of the AI market in driving its financial performance. The first quarter of 2024 saw a record-high turnover of 12.4 trillion won, equivalent to approximately 8.4 billion euros, representing a remarkable 144 percent increase compared to the same period the previous year.
The surge in operating profit has been particularly notable, reaching 2.9 trillion won compared to 346 billion won in the fourth quarter of the previous year, translating to 1.9 billion euros and 234 million euros, respectively. While net profit also experienced growth, albeit not as dramatic as operating profit, with net profit totaling 1.3 billion euros compared to a loss of 1.7 billion euros in the previous year.
SK hynix attributes its strong financial performance to the increasing demand for artificial intelligence. The company supplies memory chips to Nvidia, which leverages these chips for GPUs used in training AI applications. SK hynix anticipates a potential growth of up to sixty percent in this market next year.
Despite its focus on AI, SK hynix continues to derive a majority of its revenue from dram modules, accounting for approximately two-thirds of its turnover. The company notes a resurgence in the market for dram modules after a period of lackluster performance. In a strategic move to capitalize on this growth, SK hynix plans to ramp up dram production, even converting a former fab originally designated for nand modules to increase dram production capacity. Additionally, the company recently commenced mass production of HBM3E memory, used in Nvidia AI GPUs, further solidifying its position in the AI market.
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