By Kwanwoo Jun
SK Hynix delivered another set of strong earnings in the first quarter, beating market expectations thanks to brisk demand for artificial-intelligence chips that it thinks will persist even amid U.S. tariff uncertainty.
As the main supplier of high-bandwidth-memory products for Nvidia's most advanced graphics-processing units, South Korea's SK Hynix has been benefiting from demand for high-performance computing chips for data servers and AI applications.
It expects that trend to continue, reiterating a forecast for HBM demand to double in 2025 even as it warned that "elevated macro uncertainties" under President Trump's tariff policy could create volatility in chip demand in the second half of the year.
First-quarter net profit was 8.108 trillion won, equivalent to $5.68 billion, more than quadrupling from a year earlier, the memory-chip maker said Thursday. That topped both the previous quarter's record 8.006 trillion won and market views. Analysts had tipped profit at 5.074 trillion won, according to a consensus estimate compiled by FactSet.
Revenue rose 42% from a year earlier to 17.639 trillion won, while operating profit more than doubled to 7.441 trillion won, beating rival Samsung Electronics' estimated 6.600 trillion won profit for the quarter.
SK Hynix's stronger-than-expected quarterly results come as Trump's trade war clouds the outlook for the global chip industry. If U.S. tariffs sharply slow global growth and investing, that could curb appetite for products like HBM.
SK Hynix executives said on an earnings call Thursday that U.S. tariffs had limited impact on the first-quarter results but that they will be flexible in investment this year given the risks posed by trade restrictions.
The company continues to hold a lead over Samsung and Micron Technology, having begun mass producing advanced 12-layer HBM3E products last year. SK Hynix expects these fifth-generation HBM products to account for over 50% of its total HBM3E revenue this year.
Last month, it said it delivered samples of new, cutting-edge 12-layer HMB4 products to customers and was preparing for mass production in the second half of 2025.
According to research firm Counterpoint Technology Market Research, SK Hynix may have dethroned Samsung as the world's largest maker of dynamic random-access memory chips in the first quarter thanks to its edge in higher-end HBM products.
It remains to be seen whether SK Hynix can widen that lead in the coming quarters as it navigates tariffs challenges.
Like other U.S. trading partners, South Korea was hit with a baseline tariff of 10%, which could rise to 25% if the country doesn't reach a trade deal with Washington during a 90-day pause on the so-called reciprocal tariffs. Trump has also slapped levies on auto, steel and aluminum imports, and announced plans to impose a separate duty on semiconductors soon.
The uncertainty over which tariffs will go into effect and in what form has already hurt SK Hynix's stock. Its shares, up nearly 10% in the first three months of the year, have given back more than half of those gains.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
04-24-25 0000ET
