By Heekyong Yang and Joyce Lee
SEOUL (Reuters) -SK Hynix, a key supplier of high-bandwidth memory processors to Nvidia, said quarterly profit more than doubled and demand for AI chips was so robust that it expects only limited impact on those products from potential U.S. tariffs.
Washington has launched an investigation into semiconductor imports, arguing that extensive reliance on foreign production is a national security threat.
There have also been concerns that increased U.S. export controls on chips to China, which have resulted in a $5.5 billion hit to Nvidia, could harm SK Hynix.
“Regarding our HBM business, what we can clearly state is that there has been no change to our sales plans for this year to key customers, which remain in line with the levels set in previously signed contracts,” Kim Ki-tae, the company’s head of HBM sales & marketing told an earnings briefing.
Ryu Young-ho, a senior analyst at NH Investment & Securities, said while it was a relief that there were no issues with HBM chip shipments to Nvidia, there are still worries that advance purchases and stockpiling across the industry seen in recent months may lead to weaker demand in the second half.
SK Hynix logged its second-highest quarterly operating profit ever in the first quarter with a 158% jump to 7.4 trillion won ($5.2 billion), boosted by strong AI-related demand and stockpiling of smartphone and PC chips ahead of potential increases in U.S. tariffs.
That handily beat a 6.6 trillion won LSEG SmartEstimate, which is weighted toward more consistently accurate analysts.
Revenue soared 42% to 17.6 trillion won
The company said it expects spending by big tech firms on server chips to continue as they seek to capture early opportunities in the artificial intelligence market.
In smartphones, the advancement of AI features in new models is expected to drive replacement demand, boosting sales of high-performance mobile DRAM chips, it added.
SK Hynix has been leading a global race to meet explosive demand for HBM chips, a crucial component of chipsets made by the likes of Nvidia that help process vast amounts of data to train AI models.
It is the main HBM chip supplier to Nvidia as cross-town rival Samsung Electronics has struggled to keep up.
SK Hynix shares were down 1.5%, underperforming the benchmark KOSPI’s 0.5% fall.
($1 = 1,426.4500 won)
(Reporting by Heekyong Yang, Joyce Lee and Hyunjoo Jin; Editing by Miyoung Kim, Himani Sarkar and Edwina Gibbs)
