SK Hynix Reports Sixth Straight Record Operating Profit as AI Chip Demand Surges

South Korea’s chipmakers are raking it in. Can China close the gap?

SK Hynix reported an operating profit of 83.33 trillion won (US$62.76 billion) for the three months to September, marking its sixth consecutive record quarter. The result came on revenue of 104.62 trillion won.

Its operating profit surged 632 per cent from a year earlier, while analysts had expected the company to report about 77 trillion won. Operating profit refers to earnings from a company’s core business before interest and taxes.

AI boom drives exceptional margins

SK Hynix’s operating margin reached 79.7 per cent in the third quarter, meaning that share of its revenue was left as operating profit. The margin rose from 72 per cent in the first quarter and 76.3 per cent in the second.

The company kept almost 80 per cent of its total sales as operating profit last quarter, a margin described as almost unheard of in manufacturing. South Korean chipmakers are benefiting from the global artificial intelligence boom, with SK Hynix and Samsung riding the surge in demand for AI chips.

SK Hynix reported the figures on Wednesday. The scale of its profit shows the strength of the current AI-chip cycle and explains why South Korea’s leading memory-chip companies are recording exceptional returns.

Chinese rivals target market share

The strong results are arriving as Chinese competitors seek to take market share from South Korean chipmakers. That creates a direct competitive challenge for SK Hynix and Samsung even as the global AI boom continues to support their businesses.

Source: South China Morning Post