Latest news with #SKHynix
Yahoo
an hour ago
- Business
- Yahoo
SK Hynix Quickens AI Investments After Posting Record Profit
(Bloomberg) -- SK Hynix Inc. outlined plans to speed up spending on advanced memory production equipment after reporting record earnings, reflecting surging AI demand. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom The South Korean company notched a bigger-than-expected 68% jump in operating income in the June quarter. It now aims to accelerate planned investments after gauging potential demand from initial negotiations with customers seeking high-bandwidth memory (HBM) in 2026, according to executives. Demand for advanced memory is expected to continue to grow with customers launching new products in the second half of the year. The emergence of ChatGPT is prompting nations around the world to build their own AI infrastructure to secure data independence, the company said in a statement. SK Hynix shares remained largely unchanged after climbing as much as 3.7% earlier. The stock has shed about 10% of its value since peaking in July on concerns about growing competition in 2026. Investors are worried about rivals like Samsung Electronics Co. eating into SK Hynix's lead in HBM essential to Nvidia Corp.'s processors. The US company buys up the bulk of SK Hynix's most advanced chips, but other tech providers are eager to join the fray and build out new data centers. 'The record performance was driven by HBM,' said MS Hwang, research director at Counterpoint. 'Yet it also underscores SK Hynix's growing leadership in the overall memory market,' which includes DRAM and NAND. After the chipmaker claimed the top spot in the global DRAM market by revenue in the first quarter, it is now competing head-to-head with Samsung for leadership in the overall memory market, he said. Second-quarter operating income at SK Hynix hit 9.21 trillion won ($6.7 billion) on a 35% rise to record quarterly revenue. A recovery in NAND prices also bolstered earnings, although profit was largely driven by the lucrative HBM market, which capitalizes on low-latency architecture built from stacks of advanced DRAM. 'There is no doubt about growth potential of HBM demand,' an SK Hynix official said during a conference call. DRAM, or dynamic random access memory, is a type of memory most commonly used to process data in computers and servers. NAND is a type of memory used to store data. SK Hynix has benefited from Samsung's delay in obtaining Nvidia's certification for its most advanced product, 12-layer HBM3E. That's given SK Hynix an unusually long lead time in the highly lucrative segment. But now, SK Hynix is racing to stay ahead of deeper-pocketed Samsung. Some investors expect the chips-to-smartphone company — which this month reported its first quarterly profit decline since 2023 — to have hit bottom over the summer. Nvidia is shifting toward a new generation of memory chips, offering Samsung an opening. Goldman Sachs downgraded SK Hynix for the first time in more than three years on expectations of competitors encroaching on its market share. SK Hynix is proceeding with the construction of facilities such as a new M15X memory chip factory and a new fabrication plant in Yongin, South Korea, as well as an advanced packaging plant in Indiana. The majority of the additional spending this year will be allocated to HBM-related equipment, Chief Financial Officer Kim Woo Hyun said. In March, the company supplied the industry's first next-generation HBM4 samples to Nvidia. Price negotiations around HBM4 — which will be more expensive to produce — are ongoing, company officials said, adding SK Hynix aims to keep current levels of HBM profitability. Nvidia, which controls more than 90% of the market for chips needed to build AI systems, became the first publicly traded company to hit a valuation of $4 trillion earlier this month. Investor expectations about the company resuming sales of its H20 AI chips to China helped the stock, after US President Donald Trump's administration reversed its earlier stance on measures to limit Beijing's AI ambitions. SK Hynix was a key supplier of those AI chips designed for the Chinese market prior to the implementation of export controls, and the company is 'well positioned to respond swiftly' to Nvidia's request, an official said. The company is trying to assess concrete information, he added. The Korean chipmaker also said the 2023 waivers remain in place allowing it to ship US chipmaking equipment to SK Hynix's factories in China without US license approval, addressing concerns raised by media reports in June. China remains an important production base for SK Hynix's legacy chips, particularly as the company reallocates more of its DRAM capacity to ramp up HBM output. As memory manufacturers like SK Hynix and Samsung shift their focus toward higher-margin HBM products, supply of legacy chips — such as DDR4 and LPDDR4 — has tightened, driving up prices in recent months. 'Our fabrication plants in China are not only critical to our operations but also play a key role in the global memory semiconductor supply chain,' an executive said, adding that SK Hynix will strive to provide uninterrupted supply while remaining in line with regulations. What Bloomberg Intelligence Says SK Hynix could keep a strong operating-profit margin in 3Q as it expects bit shipments of both DRAM and NAND chips to grow further sequentially, according to just-released guidance, after it achieved robust sequential growth in 2Q. Its factory-utilization rate might improve in 3Q after its inventory decreased sequentially in 2Q. The strong sales increase in 2Q might lead to a robust operating-profit margin in 4Q as well as 3Q. -Masahiro Wakasugi and Takumi Okano, analysts Click here for the research. Long-term prospects for advanced memory makers may depend on expanding beyond Nvidia, given the incentives for the US company to diversify its vendors and negotiate lower prices. SK Hynix is looking to strengthen ties with the likes of OpenAI Inc. and deepen ties by building AI infrastructure. OpenAI Chief Executive Officer Sam Altman said in a post on X on July 21 that his company will bring online 1 million graphics processing units (GPUs) by the end of the year and is trying to figure out how to scale that a hundredfold. --With assistance from Shinhye Kang, Edwin Chan and Vlad Savov. (Updates with details on capex investment and executive comments from eighth paragraph.) Burning Man Is Burning Through Cash Elon Musk's Empire Is Creaking Under the Strain of Elon Musk It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan A Rebel Army Is Building a Rare-Earth Empire on China's Border What the Tough Job Market for New College Grads Says About the Economy ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
an hour ago
- Business
- Yahoo
SK Hynix Quickens AI Investments After Posting Record Profit
(Bloomberg) -- SK Hynix Inc. outlined plans to speed up spending on advanced memory production equipment after reporting record earnings, reflecting surging AI demand. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom The South Korean company notched a bigger-than-expected 68% jump in operating income in the June quarter. It now aims to accelerate planned investments after gauging potential demand from initial negotiations with customers seeking high-bandwidth memory (HBM) in 2026, according to executives. Demand for advanced memory is expected to continue to grow with customers launching new products in the second half of the year. The emergence of ChatGPT is prompting nations around the world to build their own AI infrastructure to secure data independence, the company said in a statement. SK Hynix shares remained largely unchanged after climbing as much as 3.7% earlier. The stock has shed about 10% of its value since peaking in July on concerns about growing competition in 2026. Investors are worried about rivals like Samsung Electronics Co. eating into SK Hynix's lead in HBM essential to Nvidia Corp.'s processors. The US company buys up the bulk of SK Hynix's most advanced chips, but other tech providers are eager to join the fray and build out new data centers. 'The record performance was driven by HBM,' said MS Hwang, research director at Counterpoint. 'Yet it also underscores SK Hynix's growing leadership in the overall memory market,' which includes DRAM and NAND. After the chipmaker claimed the top spot in the global DRAM market by revenue in the first quarter, it is now competing head-to-head with Samsung for leadership in the overall memory market, he said. Second-quarter operating income at SK Hynix hit 9.21 trillion won ($6.7 billion) on a 35% rise to record quarterly revenue. A recovery in NAND prices also bolstered earnings, although profit was largely driven by the lucrative HBM market, which capitalizes on low-latency architecture built from stacks of advanced DRAM. 'There is no doubt about growth potential of HBM demand,' an SK Hynix official said during a conference call. DRAM, or dynamic random access memory, is a type of memory most commonly used to process data in computers and servers. NAND is a type of memory used to store data. SK Hynix has benefited from Samsung's delay in obtaining Nvidia's certification for its most advanced product, 12-layer HBM3E. That's given SK Hynix an unusually long lead time in the highly lucrative segment. But now, SK Hynix is racing to stay ahead of deeper-pocketed Samsung. Some investors expect the chips-to-smartphone company — which this month reported its first quarterly profit decline since 2023 — to have hit bottom over the summer. Nvidia is shifting toward a new generation of memory chips, offering Samsung an opening. Goldman Sachs downgraded SK Hynix for the first time in more than three years on expectations of competitors encroaching on its market share. SK Hynix is proceeding with the construction of facilities such as a new M15X memory chip factory and a new fabrication plant in Yongin, South Korea, as well as an advanced packaging plant in Indiana. The majority of the additional spending this year will be allocated to HBM-related equipment, Chief Financial Officer Kim Woo Hyun said. In March, the company supplied the industry's first next-generation HBM4 samples to Nvidia. Price negotiations around HBM4 — which will be more expensive to produce — are ongoing, company officials said, adding SK Hynix aims to keep current levels of HBM profitability. Nvidia, which controls more than 90% of the market for chips needed to build AI systems, became the first publicly traded company to hit a valuation of $4 trillion earlier this month. Investor expectations about the company resuming sales of its H20 AI chips to China helped the stock, after US President Donald Trump's administration reversed its earlier stance on measures to limit Beijing's AI ambitions. SK Hynix was a key supplier of those AI chips designed for the Chinese market prior to the implementation of export controls, and the company is 'well positioned to respond swiftly' to Nvidia's request, an official said. The company is trying to assess concrete information, he added. The Korean chipmaker also said the 2023 waivers remain in place allowing it to ship US chipmaking equipment to SK Hynix's factories in China without US license approval, addressing concerns raised by media reports in June. China remains an important production base for SK Hynix's legacy chips, particularly as the company reallocates more of its DRAM capacity to ramp up HBM output. As memory manufacturers like SK Hynix and Samsung shift their focus toward higher-margin HBM products, supply of legacy chips — such as DDR4 and LPDDR4 — has tightened, driving up prices in recent months. 'Our fabrication plants in China are not only critical to our operations but also play a key role in the global memory semiconductor supply chain,' an executive said, adding that SK Hynix will strive to provide uninterrupted supply while remaining in line with regulations. What Bloomberg Intelligence Says SK Hynix could keep a strong operating-profit margin in 3Q as it expects bit shipments of both DRAM and NAND chips to grow further sequentially, according to just-released guidance, after it achieved robust sequential growth in 2Q. Its factory-utilization rate might improve in 3Q after its inventory decreased sequentially in 2Q. The strong sales increase in 2Q might lead to a robust operating-profit margin in 4Q as well as 3Q. -Masahiro Wakasugi and Takumi Okano, analysts Click here for the research. Long-term prospects for advanced memory makers may depend on expanding beyond Nvidia, given the incentives for the US company to diversify its vendors and negotiate lower prices. SK Hynix is looking to strengthen ties with the likes of OpenAI Inc. and deepen ties by building AI infrastructure. OpenAI Chief Executive Officer Sam Altman said in a post on X on July 21 that his company will bring online 1 million graphics processing units (GPUs) by the end of the year and is trying to figure out how to scale that a hundredfold. --With assistance from Shinhye Kang, Edwin Chan and Vlad Savov. (Updates with details on capex investment and executive comments from eighth paragraph.) Burning Man Is Burning Through Cash Elon Musk's Empire Is Creaking Under the Strain of Elon Musk It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan A Rebel Army Is Building a Rare-Earth Empire on China's Border What the Tough Job Market for New College Grads Says About the Economy ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Business Standard
an hour ago
- Business
- Business Standard
Bright spots emerge in corporate earnings as tariff uncertainty lingers
Companies have reported over July 16-22 a combined full-year loss of as much as $7.8 billion, with the automotive, aerospace and pharmaceutical sectors being hurt most by tariffs Reuters Some of the world's top tech firms, including US search giant Alphabet, South Korean chipmaker SK Hynix and Indian IT services provider Infosys, have provided upbeat guidance in their latest earnings reports, shrugging off an uncertain US trade policy. Corporate operations have been overshadowed by erratic US trade action that has upended supply chains and left firms to navigate fluid tariffs on top of broader economic uncertainties such as regulatory change and currency fluctuation. But tech titans Alphabet, SK Hynix and Infosys - which all reported earnings that beat market forecasts - predicted brighter days to come, with Alphabet and SK Hynix both flagging plans to boost spending. Nvidia supplier SK Hynix booked record quarterly profit, boosted by strong demand for artificial intelligence chips and customers stockpiling ahead of potential US tariffs. Indian IT services provider Infosys raised the floor of its annual revenue forecast range to 1 per cent to 3 per cent, from flat to 3 per cent, matching analyst expectations. Among the major earnings on Thursday, Nestle, Reckitt, Roche and Wizz report before local markets open. Turbulence The upbeat guidance amounted to a bright spot in a turbulent second-quarter earnings season that has so far seen businesses as varied as chipmakers and steelmakers report downbeat results. Companies have reported over July 16-22 a combined full-year loss of as much as $7.8 billion, with the automotive, aerospace and pharmaceutical sectors being hurt most by tariffs. South Korea's Hyundai Motor on Thursday posted a decline in second-quarter operating profit, down 16 per cent from a year earlier, as US tariffs on vehicles and parts started to weigh on its bottom line. The automaker said US tariffs cost the company 828 billion won ($606.5 million) in the second quarter. General Motors said tariffs knocked $1.1 billion from second-quarter earnings. On Wednesday, Tesla Chief Executive Elon Musk said US government cuts in support for electric vehicle makers could lead to a "few rough quarters", as his firm reported its worst quarterly sales decline in over a decade. Trade Deals News that the US had struck a deal with Japan to lower new tariffs on auto imports and spare it punishing levies on other goods lifted stock markets on Wednesday. It stirred hope for a similar deal with the European Union ahead of August 1, when the US said new tariffs will go into effect. The European Union is moving toward a trade deal that could include a 15 per cent US baseline tariff on EU goods and possible exemptions, two European diplomats said. One surprise on Thursday was South Korea's finance ministry saying tariff negotiations had been postponed due to a scheduling conflict for US Treasury Secretary Scott Bessent. The announcement cast fresh doubt about whether South Korea would be able to avert US import duties that could hit some of its major exporting industries. All eyes are on Washington as governments scramble to close trade deals ahead of next week's deadline that the White House has already pushed back under pressure from markets and intense lobbying by industry. While the Japan deal has eased investor worry, the threat of higher tariffs on other large economies remains, including the European Union, Canada and Brazil. An EU-China summit on Thursday will test European resolve and unity as the bloc faces trade pressure from both China as well as the United States, while US Treasury Secretary Scott Bessent meets Chinese officials in Sweden next week. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Recorder
2 hours ago
- Business
- Business Recorder
South Korean shares cut gains as US postpones trade talks
South Korean shares erased early gains on Thursday, as the U.S. suddenly postponed trade talks scheduled for Friday, raising uncertainty over tariff negotiations. The benchmark KOSPI was up 26.40 points, or 0.83%, at 3,210.17 as of 0211 GMT, after rising as much as 1.70% earlier in the session. Talks between top South Korean and U.S. officials to negotiate over U.S. President Donald Trump's tariffs have been postponed due to a scheduling conflict for U.S. Treasury Secretary Scott Bessent, South Korea's finance ministry said on Thursday. Hyundai Motor was down 0.45%, after falling as much as 1.80% on the news. The automaker rallied on Wednesday after Japan's trade deal with the U.S. raised hopes that South Korea might also get a cut in 25% auto tariffs. South Korea's economy grew at the fastest pace in more than a year in the second quarter, beating market expectations, buoyed by rebounding consumer spending and a surge in exports, driven by robust demand for technology. SK Hynix gained 1.58%, as the chipmaker flagged plans to boost spending this year after posting a record quarterly profit. Rival Samsung Electronics rose 0.38%. Among other index heavyweights, battery maker LG Energy Solution climbed 8.77%, while steelmaker POSCO Holdings added 0.15% and drugmaker Samsung BioLogics rose 3.20%. Of the total 935 traded issues, 280 shares advanced, while 606 declined. Foreigners were net buyers of shares worth 575.3 billion won ($420.33 million). The won was quoted at 1,369.9 per dollar on the onshore settlement platform, 0.43% higher than its previous close at 1,375.8.
Wall Street Journal
3 hours ago
- Business
- Wall Street Journal
SK Hynix to Boost Investment After Record Results on Strong AI Chip Demand
SK Hynix 000660 0.09%increase; green up pointing triangle, the main supplier of high-bandwidth-memory products for Nvidia, plans to increase spending this year to meet strong demand for artificial-intelligence chips that helped it achieve a record second quarter. The South Korean memory-chip maker said Thursday that aggressive AI investments by global big technology companies led to a steady increase in demand for AI memory chips, including 12-layer HBM3E products. Shipments of both DRAM and NAND flash memory products were higher than expected, it said.
