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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 mentioned 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 greater 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 strong gross sales of excessive bandwidth reminiscence (HBM) chips utilized in AI {hardware}.
However the chipmaker warned of attainable demand volatility within the second half because of macroeconomic uncertainties whereas stressing that HBM demand will likely be much less affected by potential US tariffs on semiconductors.
“Demand uncertainty will improve due to tariff coverage modifications 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 and marketing, instructed analysts on Thursday.
SK Hynix, a primary 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 keeping with Counterpoint Analysis. Dram is probably 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 most likely proceed in the intervening time as Samsung finds it troublesome to meet up with SK Hynix in HBM,” mentioned Daniel Kim, an analyst at Macquarie. “AI and HBM are fast-changing markets. It isn’t simple 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 mentioned. Its HBM market share will stay above 50 per cent this yr, with Samsung’s share falling to beneath 30 per cent and US rival Micron Know-how’s share rising to nearly 20 per cent, in keeping with market researcher TrendForce.
The corporate expects Large Tech to take care of its spending on server chips to compete in AI, whereas new AI options in smartphones will gas alternative demand, rising gross sales of high-performance cell 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 file excessive of Won1.5tn thus far this month, in keeping with Bloomberg knowledge, with the trade going through rising uncertainties from looming US tariffs and Washington’s more durable export controls on China, in addition to rising international recession fears.
Overseas traders bought a web Won2.8tn of the corporate’s shares this month, after the inventory worth 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 gained’t matter with bigger forces at work,” Morgan Stanley analysts mentioned in a analysis be aware. “The true tariff affect on reminiscence resembles an iceberg, with extra hazard unseen beneath the floor and nonetheless approaching.”
President Donald Trump has mentioned 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 may have an effect on Hynix’s earnings, however the affect will most likely be restricted, given the availability scarcity of high-end HBM chips,” mentioned Macquarie’s Kim. “Optimistic momentum is predicted for the corporate this yr and subsequent until the worldwide financial system slips into recession.”
