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Chipmaker SK Hynix’s quarterly working revenue has greater than doubled on sturdy gross sales of superior reminiscence chips utilized in synthetic intelligence merchandise, amid stockpiling forward of looming US tariffs.
Analysts stated SK Hynix toppled arch-rival Samsung Electronics because the world’s greatest dynamic random-access reminiscence (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 yr, a lot increased than the Won6.6tn forecast by analysts polled by Bloomberg.
Gross sales elevated 42 per cent yr on yr to Won17.6tn. The sturdy earnings have been pushed by sturdy gross sales of excessive bandwidth reminiscence (HBM) chips utilized in AI {hardware}.
However the chipmaker warned of attainable demand volatility within the second half as a consequence of macroeconomic uncertainties whereas stressing that HBM demand will probably be much less affected by potential US tariffs on semiconductors.
“Demand uncertainty will enhance due to tariff coverage adjustments and different restrictions, however that is expediting demand for IT shopper items as some customers rush to purchase merchandise earlier than costs rise,” Kyu Hyun Kim, head of Dram advertising, informed analysts on Thursday.
SK Hynix, a essential HBM provider to Nvidia, captured 36 per cent of the Dram market within the January-March interval, adopted by Samsung at 34 per cent, based on Counterpoint Analysis. Dram is essentially the most extensively used reminiscence chip in PCs and servers to assist course of knowledge. HBMs are made by stacking Dram chips.
“The modified dynamics will in all probability proceed in the meanwhile 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 yr, with Samsung’s share falling to under 30 per cent and US rival Micron Know-how’s share rising to virtually 20 per cent, based on market researcher TrendForce.
The corporate expects Huge Tech to take care of its spending on server chips to compete in AI, whereas new AI options in smartphones will gasoline alternative demand, growing gross sales of high-performance cellular Dram chips. SK Hynix nonetheless expects HBM demand to double this yr.
Its shares fell 0.8 per cent on Thursday morning as quick promoting of its inventory surged to a report excessive of Won1.5tn to this point this month, based on Bloomberg knowledge, with the trade going through growing uncertainties from looming US tariffs and Washington’s harder export controls on China, in addition to rising international recession fears.
International buyers bought 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 increase. The shares have fallen a few fifth from a January excessive.
“Earnings season received’t matter with bigger forces at work,” Morgan Stanley analysts stated in a analysis notice. “The actual tariff affect on reminiscence 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 clients, with the US chipmaker recording a $5.5bn earnings hit this month because of this.
“This could have an effect on Hynix’s earnings, however the affect will in all probability be restricted, given the availability scarcity of high-end HBM chips,” stated Macquarie’s Kim. “Constructive momentum is anticipated for the corporate this yr and subsequent except the worldwide financial system slips into recession.”
