The South Korean semiconductor powerhouse SK Hynix announced record-breaking quarterly earnings on Thursday, driven by an increase in worldwide demand for artificial intelligence technology. This demonstrates the company’s resilience amid growing concerns over escalating tariff pressures.
The globe’s second-biggest manufacturer of memory chips leads the sector in high-bandwidth memory (HBM) semiconductor products and serves as a vital provider for the American giant Nvidia.
SK Hynix reported an operating profit of 7.44 trillion won ($5.19 billion), marking a significant rise of approximately 158% compared to the same period last year, with revenues totaling 17.64 trillion won for the first quarter.
These two numbers represented the firm’s next-to-record-high financial outcomes for a three-month period, coming right after the previous quarter’s achievements.
This announcement follows Taiwanese semiconductor leader TSMC revealing an increase in net profits for the initial quarter last week, along with predictions of strong demand for AI tech, even amid concerns over potential US tariffs affecting this crucial industry.
The net income surged fourfold from the prior year to reach 8.11 trillion won ($5.67 billion). The company attributed this growth to an unexpectedly rapid expansion of the memory market, driven by competitive efforts to develop artificial intelligence systems and increased demand for stockpiling inventories.
The firm also stated that their yearly HBM sales for this year are projected to increase twofold from the previous year.
Even though the reports were positive, SK Hynix’s stock dropped over one percent during early trading in Seoul.
Less affected
South Korea significantly exports to the United States, and its leading sectors—semiconductors and automobiles—would face severe consequences due to President Donald Trump’s proposed 25 percent tariffs.
The nation also houses the globe’s biggest manufacturer of memory chips, Samsung.
Experts believe that SK hynix’s strength stems from the company’s expansion within the DRAM market.
Recently, SK Hynix claimed the top position in DRAM revenue with a 36% market share, as reported by specialized research company Counterpoint. This achievement marks the first time they have outpaced Samsung and represents the first shift at the summit of this industry in more than forty years.
“At present, global attention is centered on the effects of tariffs; however, the crucial question remains: What will become of HBM DRAM?” noted MS Hwang, who leads Counterpoint Research as their director.
In the near term, this sector appears more resilient to trade shocks due to robust AI demand. Importantly, HBM’s final product is AI servers, inherently capable of operating across borders.
In a conference call, SK hynix stated that “the uncertainty regarding semiconductor demand has increased,” however, their “sales strategies for major clients this year remain unaffected.”
An SK Hynix representative stated, “On the whole, our global clients continue to sustain their earlier mentioned memory requirements.”
The firm stated, “Some clients are accelerating their demand by seeking short-term supply advancements.”
The firm additionally pointed out that although about sixty percent of its sales come from customers in the U.S., customs duties affect only those goods that are sent directly to this country.
An SK Hynix representative stated, “Despite having headquarters in the U.S., many of our memory products are frequently sent to destinations beyond U.S. borders, indicating that the percentage of goods directly exported to the United States isn’t very substantial.”
