SK Hynix earnings hit record profit but miss LSEG estimates

SK Hynix earnings reached another quarterly profit record in the second quarter, as demand for artificial intelligence memory chips lifted sales and margins. The South Korean chipmaker reported revenue of 79.32 trillion won and operating profit of 60.54 trillion won, below LSEG SmartEstimates of 84 trillion won and 64 trillion won cited by CNBC.

Revenue rose 257% from a year earlier in the quarter ended June, while operating profit increased nearly 557%, according to the company’s release. Against the previous quarter, revenue was up 51% and operating profit rose 61%.

The figures show how demand for high-bandwidth memory, or HBM, has become central to SK Hynix’s growth. CNBC reported that the company supplies memory components used in products ranging from data-center hardware to consumer electronics, including smartphones.

Why did SK Hynix profit rise?

SK Hynix’s profit rose as AI-related demand continued to support sales of high-bandwidth memory chips, CNBC reported. HBM is an advanced type of memory designed to move large volumes of data at high speed, a requirement for many AI computing systems.

The company’s strength in HBM has helped cement its position in a part of the semiconductor market tied closely to AI infrastructure spending. CNBC reported that SK Hynix counts U.S. technology companies, including Nvidia, among its key customers.

• Second-quarter revenue: 79.32 trillion won, compared with 84 trillion won expected under LSEG SmartEstimates cited by CNBC.
• Second-quarter operating profit: 60.54 trillion won, compared with 64 trillion won expected.
• Year-on-year revenue growth: 257%, according to the company’s release.
• Year-on-year operating profit growth: nearly 557%, according to the company’s release.

LSEG SmartEstimates are weighted toward forecasts from analysts with stronger accuracy records, according to CNBC. On that basis, both revenue and operating profit came in below expectations, even as the company delivered record profit.

The results add to evidence that AI demand is reshaping the memory chip cycle. SK Hynix’s HBM products are designed for systems that process large data sets quickly, which makes them relevant to AI servers and other high-performance computing equipment.

CNBC also reported that SK Hynix’s partnership with Nvidia recently expanded through a multiyear agreement worth more than $500 billion. Nvidia is a major customer for advanced memory used alongside AI processors, according to the report.

The company’s second-quarter release therefore presented two signals for investors and industry buyers: demand remained strong enough to push profit to a record, while headline revenue and operating profit still fell short of the analyst estimates cited by CNBC.

This story draws on original reporting from CNBC.