Nvidia Supplier SK Hynix's Earnings Beat Estimates on AI Boom
(Bloomberg) -- SK Hynix Inc. earned better-than-expected quarterly profit after US tariff-induced fears of trade disruptions pushed companies around the world to stock up on both advanced chips and memory used in PCs and smartphones.
The company reported operating income of 7.44 trillion won ($5.2 billion) in the March quarter, exceeding the projected 6.6 trillion won. Revenue rose to 17.64 trillion won, the company's second-highest quarterly performance on the heels of record revenue and operating profit in the prior quarter.
SK Hynix's results highlight the scale of global data center investments and the company's leading role in supplying high-bandwidth memory needed for Nvidia Corp.'s accelerators to train artificial intelligence. The Icheon, South Korea-based company on Thursday maintained its forecast of HBM demand doubling this year from 2024.
Still, SK Hynix said it's bracing for increased uncertainty and volatility spurred by US tariff policies.
SK Hynix's stock price is up just around 4% since the start of the year. Fears of a tariff-fueled global recession as well as a reevaluation of AI profitability in the face of DeepSeek's low-cost models are denting momentum that had helped its shares more than double over the past two years.
The stock performance reflects the chipmaker's vulnerability to any slowdown in AI spending and the Trump administration's attempts to reset global trade relations. Should trade tensions tip economies around the world into recession, end-demand for all products containing chips is at risk of plummeting.
'Earnings season won't matter with larger forces at work,' Morgan Stanley analysts led by Shawn Kim said in a note to investors this week. 'The real tariff impact on memory resembles an iceberg, with most danger unseen below the surface and still approaching.'
--With assistance from Debby Wu.
More stories like this are available on bloomberg.com
First Published: 24 Apr 2025, 04:36 AM IST
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