South Korea's SK Hynix, a leading supplier of dynamic random access memory (DRAM), has reported a 42% year-on-year increase in revenue and a 158% surge in operating profit for the first quarter of the year. The company's strong results are largely attributed to the growing demand for its high-bandwidth memory (HBM) offerings, which are used in artificial intelligence (AI) chipsets.
According to SK Hynix's earnings release, the company's revenue reached 17.64 trillion won ($12.36 billion), exceeding market expectations. Operating profit also soared to 7.44 trillion won, a significant increase from the same period last year. The company's HBM products, which are used in AI servers, have been in high demand, particularly from clients such as Nvidia, a US-based AI darling.
While the company's quarterly revenue and operating profit beat estimates, SK Hynix warned that macroeconomic uncertainties, including US tariff policy, could create demand volatility in the second half of the year. The company expects a relatively limited impact from tariffs on its AI server demand, but consumer electronics, such as PCs and smartphones, are expected to benefit from the launch of new products featuring AI functionalities this year.
SK Hynix cited the growing adoption of AI as a key driver of its business. The company expects Big Tech's spending on AI to continue, with the ecosystem's expansion driven by open-source AI model offerings and "sovereign AI projects" that will stoke memory demand. The company's executives highlighted the example of DeepSeek's open-source R1 reasoning model, which achieved competitive performance with limited hardware resources earlier this year, as a catalyst for AI development.
The company's strong results are not unique to SK Hynix. Micron Technology and Samsung Electronics, other players in the DRAM space, are also benefiting from the growing demand for AI servers and HBM products. As the AI boom continues, SK Hynix is well-positioned to capitalize on the trend, driven by its strong product offerings and relationships with key clients.