SK Hynix has achieved a quarterly operating profit exceeding KRW 10 trillion for the first time since its founding, continuing its streak of strong performance. By focusing on high-value products like HBM, the company maximized profitability and is smoothly preparing for next year's business.

On the 29th, SK Hynix announced its financial results for the third quarter of this year, reporting sales of KRW 24.4489 trillion and an operating profit of KRW 11.3834 trillion. Compared to the third quarter of last year, sales increased by 39%, and operating profit rose by 62%. The operating profit growth rate exceeded the sales growth rate, showing improved profitability. The operating profit margin reached 47%, surpassing the previous quarter's 41%.

The rise in DRAM and NAND prices and the increase in shipments of high-performance products for AI servers were analyzed as the main drivers of this performance.

An SK Hynix representative stated, "The expansion of AI infrastructure investment has led to a surge in demand for memory overall," and added, "The expansion of sales of high-value product lines such as HBM3E 12-layer and server-oriented DDR5 has once again surpassed the highest performance recorded in the previous quarter." They further emphasized, "Particularly, as demand for AI servers increased, shipments of high-capacity DDR5 of 128GB or more more than doubled compared to the previous quarter, and the proportion of AI server-oriented enterprise SSDs (eSSD) with price premiums expanded in NAND as well."

Based on this performance, cash and cash equivalents at the end of the third quarter increased by KRW 10.9 trillion from the previous quarter to KRW 27.9 trillion. Borrowings amounted to KRW 24.1 trillion, successfully establishing a net cash position of KRW 3.8 trillion.

The outlook remains positive. SK Hynix analyzed that the AI market is rapidly transitioning towards inference, with movements to distribute AI server computational burdens across various infrastructures, including general servers. As a result, demand is expected to expand across the memory spectrum, including high-performance DDR5 and eSSD. Additionally, the recent trend of major AI companies forming strategic partnerships and announcing AI data center expansion plans is seen as a positive factor. There is an expectation of balanced demand growth across various product lines, including general server memory, in addition to HBM. SK Hynix plans to accelerate the transition to the most advanced 10-nanometer class 6th generation (1c) process, which is stably in mass production, to expand the supply of a 'full-line up' of DRAM products for servers, mobile, and graphics to meet customer demand. In NAND, the company plans to increase the supply of TLC and QLC products based on the world's highest 321-layer to quickly respond to customer needs.

Next year's business is also evaluated to be on track. It is reported that negotiations for next year's HBM supply with major customers have been completed. The company emphasized that the 6th generation HBM4, which completed development and established a mass production system last month, met all customer performance requirements. For HBM4, shipments will begin in the fourth quarter, with plans to expand sales in earnest from next year. Additionally, it was reported that the company has secured all customer demand for next year across all DRAM and NAND products due to the rapidly increasing AI memory demand. To respond to customer demand, SK Hynix plans to quickly secure additional production capacity and accelerate the transition to advanced processes through the Cheongju M15X plant, which recently opened its cleanroom early and began equipment installation. Next year's investment scale is also expected to increase compared to this year.

Kim Woo-hyun, Vice President (CFO) of SK Hynix, stated, "With the innovation of AI technology, the memory market is transitioning to a new paradigm, and demand is starting to spread across all product areas," and added, "We will continue to respond to customer demand based on market-leading products and differentiated technological competitiveness, solidifying our AI memory leadership."

Regarding Samsung Electronics' full-scale supply of HBM3E products, industry analysts believe that the impact on SK Hynix's performance will be limited. As demand for HBM products still exceeds supply and the market is expanding, it is unlikely that competitors entering the market this year or next will absorb existing suppliers' volumes or engage in competitive bidding.

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