SK Hynix’s turnaround gains traction from US, China

SK Hynix Inc., the world’s No. 2 memory chipmaker, has made a significant business turnaround in the US and China, which made up 80% of its sales, as buoyant AI chip demand drove the prices of high-performing chips such as high-bandwidth memory (HBM) and NAND flash higher.

The top AI chip supplier of Nvidia Corp., which controls 80% of AI chips, saw its US sales nearly triple to 15.98 trillion won ($11.8 billion) in the first half of this year, compared with 5.47 trillion won in the year prior, according to its half-year financial reports published last week.
 
The US accounted for 55.4% of SK Hynix's 28.85 trillion won sales recorded in the first six months of this year, more than double the previous year's 12.39 trillion won.

In China, it raked in 8.61 trillion won in sales in the first half of this year, more than twice the prior year's 3.88 trillion won. The neighboring country made up 29.8% of SK Hynix’s sales.

On top of the average selling price increase for both traditional and high-performing memory chips, growing demand for HBM3E, the fifth-generation HBM and solid-state drives for enterprise applications contributed to the shipment growth.

In the first half of this year, SK Hynix’s DRAM sales expanded by more than 10 trillion won on-year to 18.19 trillion won, led by next-generation memory double data rate 5 (DDR 5) and HBM.

NAND flash sales were up by 5.6 trillion won to 9.59 trillion won during the same period.

In the second quarter of this year, SK Hynix posted its largest-ever quarterly revenue and highest operating profit in six years.

US, CHINA UNITS

Its US sales arm SK Hynix America swung to a net profit of 165.2 billion won in the first half ended in June from a 74.1 billion won loss in the year prior. Its revenue nearly tripled to 12.19 trillion won, versus 4.27 trillion won over the same period.

In China, SK Hynix operates a chip foundry unit in Wuxi; a chip packaging factory in Chongqing; and a NAND flash plant in Dalian that it acquired in 2021.

In the first half of this year, the Wuxi factory operation turned to a net profit of 119.4 billion won from a loss of 165.6 billion in the previous year.

Given that the Wuxy plant's half-year sales remained steady at around 2.7 trillion won, its turnaround indicates a rise in DRAM’s operating margin.

Write to Jeong-Soo Hwang at hjs@hankyung.com

Yeonhee Kim edited this article.