FILE PHOTO: The logo of SK Hynix is seen at its booth during The 26th Semiconductor Exhibition (SEDEX 2024) in Seoul, South Korea, October 23, 2024. REUTERS/Kim Hong-Ji/File Photo
SEOUL (Reuters) -SK Hynix flagged plans to boost spending this year after posting on Thursday a record quarterly profit, as the Nvidia supplier seeks to alleviate investor concerns about slowing growth for artificial intelligence chipsets.
The South Korean chipmaker said demand growth would be driven by new model launches by customers and that it was on track to double high-bandwidth memory (HBM) chip sales for the full year compared to 2024.
Its shares climbed more than 3% in early trade, compared to the 0.8% rise in the benchmark South Korean KOSPI index
Hynix did not quantify its new investment plan for 2025. Ryu Young-ho, a senior analyst at NH Investment & Securities, said its proactive response to customer demand for next year appeared to reflect its confidence, as it faces major competition from Samsung Electronics.
At an earnings conference, SK Hynix also said it was in talks with a major customer regarding sales next year which are "proceeding as planned". It did not elaborate.
In March, SK Hynix said it planned to finalise sales with customers for 2026 within the first half of this year.
"SK Hynix foresees that increasing competition among big tech companies to enhance inference of AI models would lead to higher demand for high-performance and high-capacity memory products," it said in a statement.
Chaotic U.S. policy and turbulence over tariffs have overshadowed the outlook for many companies, and SK Hynix said its earnings were helped by demand from customers to increase inventory ahead of potential tariffs.
Earlier this month, U.S. President Donald Trump threatened to soon introduce tariffs on semiconductors. SK Hynix said in April that the proportion of its exports to the United States was not high, but analysts said the company could face pricing pressure from customers squeezed by U.S. tariffs.
A much-anticipated meeting between U.S. and South Korean officials scheduled for Friday to discuss tariffs was cancelled. Hopes for a deal had risen after Japan and the United States reached a deal on tariffs this week.
Hynix reported a 9.2 trillion won ($6.69 billion) operating profit for the April-June period, up 69% from 5.5 trillion won a year earlier.
That compared with a 9.0 trillion won average forecast by LSEG SmartEstimate, which is weighted toward analysts who are more consistently accurate. Revenue rose 35% to 22.2 trillion won during the quarter.
HYNIX VS SAMSUNG
Its profit is double the quarterly operating profit expected by crosstown rival Samsung Electronics, which this month projected a worse-than-expected 56% plunge in second-quarter operating profit due to weak AI chip sales.
SK Hynix overtook Samsung Electronics as the world's top memory chipmaker in the first quarter due to its leadership in HBM chips, a crucial component of AI chipsets designed by the likes of Nvidia that assist the processing of vast amounts of data to train AI models.
After posting a series of record profits boosted by strong AI demand, SK Hynix is bracing for potential U.S. tariffs and rising competition from rivals in supplying advanced chips to Nvidia, analysts say.
Last Thursday, SK Hynix saw its shares close about 9% lower after Goldman Sachs downgraded the stock to "neutral", expecting HBM prices would decline for the first time next year.
Shares of SK Hynix are up 54.7% so far this year, outperforming the KOSPI's 32.7% rise.
($1 = 1,374.5800 won)
(Reporting by Heekyong Yang and Joyce Lee and Hyunjoo Jin; Editing by Jamie Freed, Lincoln Feast and Muralikumar Anantharaman)
