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By Joyce Lee and Hyunjoo Jin
SEOUL (Reuters) -South Korea’s SK Hynix forecast gross sales of its high-end semiconductors utilized in generative synthetic intelligence chipsets would double this yr after reporting a document quarterly revenue that surpassed its larger rival Samsung (KS:005930).
Shares in SK Hynix, a key provider to AI chip big Nvidia (NASDAQ:NVDA), nonetheless, dropped 3% on Thursday as the corporate warned of steeper demand declines in commodity reminiscence chips utilized in smartphones and computer systems, as a result of financial uncertainty and rising competitors from Chinese language rivals.
Earlier than the end result, SK Hynix shares had jumped about 30% to date this yr on bullish sentiment pushed by its enterprise discussions with Nvidia, outperforming Samsung, whose shares rose 2% over the identical interval.
“Uncertainties exist for the reminiscence chip market this yr as commerce protectionism grows and geopolitical dangers deepen, whereas PC and smartphone corporations alter inventories,” SK Hynix Chief Monetary Officer Kim Woo-hyun informed analysts on an earnings name.
The corporate mentioned provide will stay tight for high-performance chips on account of rising demand, however demand declines will speed up for legacy merchandise.
Lee Min-hee, an analyst at BNK Funding & Securities, mentioned whereas fourth-quarter outcomes have been sturdy, SK Hynix’s forecast for first-quarter chip shipments was weaker than anticipated and upset buyers.
“I had forecasted simply above 6 trillion gained working revenue for Q1, however now I am anticipating round 5.5 trillion gained,” Lee mentioned.
SK Hynix mentioned its shipments of DRAM and NAND flash reminiscence chips would decline by between 10% and 20% within the first quarter from the earlier quarter.
STRONG AI CHIP SALES
The world’s second-biggest reminiscence chipmaker posted an working revenue of 8.1 trillion gained ($5.64 billion) within the October-December quarter, barely above expectations and exceeding Samsung’s forecast fourth-quarter working revenue of 6.5 trillion gained.
That is the primary time that SK Hynix’s quarterly working revenue beat Samsung’s whole working revenue, analysts mentioned, as its rival lags in supplying high-end high-bandwidth reminiscence (HBM) chips to Nvidia.
The corporate mentioned HBM chips accounted for 40% of its whole DRAM income within the fourth quarter. General, its income for the quarter rose 75% year-on-year to 19.8 trillion gained, whereas its working revenue was up greater than 20-fold from a yr earlier when it was popping out of the largest chip business downturn in over a decade.
SK Hynix has been more and more outperforming rivals Samsung and U.S.-based Micron Know-how (NASDAQ:MU) in latest quarters, because it advantages probably the most from AI-driven urge for food for high-end reminiscence chips following its early entry and huge investments in HBM chip growth.
However SK Hynix informed analysts its 2025 capital expenditure would rise solely barely from final yr, with investments specializing in HBM manufacturing and new factories in South Korea.
“SK Hynix’s conservative capex plan for HBM chips fuelled considerations about slowdown in demand,” Jung Min-gyu, an analyst Sangsangin Funding & Securities mentioned.
A SK Hynix government mentioned the corporate had already begun provide talks for 2026 for the HBM chips utilized in AI chipsets and anticipated to have higher visibility within the first half about cargo plans for subsequent yr.
“The AI business has a possible to develop above most expectations and would require large computing energy. There is not any doubt about long-term demand for HBM chips,” the chief mentioned.
SK Hynix mentioned it started provide of 12-layer HBM3E chips, probably the most superior HBM mannequin presently in mass manufacturing, to a buyer within the fourth quarter.
It expects it can begin supplying much more superior 16-layer HBM4 chips within the second half of 2026 and that Chinese language rivals will face difficulties in creating superior chips as a result of U.S. restrictions.
($1 = 1,435.1200 gained)
