July 29 (Asia Today) — SK hynix reported another record quarterly performance Wednesday, extending its streak of all-time-high operating profits to five consecutive quarters as demand for artificial intelligence memory continued to surge.

The South Korean chipmaker posted second-quarter revenue of 79.32 trillion won ($53.76 billion) and operating profit of 60.54 trillion won ($41.03 billion).

Its operating margin reached 76%.

Revenue increased 257% from a year earlier while operating profit jumped 557%, the company said.

First-half revenue reached 131.9 trillion won ($89.39 billion), surpassing 100 trillion won for the first time. Operating profit for the first six months totaled 98.15 trillion won ($66.52 billion).

The company said strong investment in AI infrastructure continued to drive demand, while higher prices for advanced products used in AI servers helped produce its strongest quarterly results.

SK hynix said prices for both DRAM and NAND flash memory rose sharply from the previous quarter.

The company increased sales of higher-value products, including high-bandwidth memory, DRAM for AI servers and enterprise solid-state drives.

Nonoperating gains, including foreign exchange benefits and increases in the value of investment assets, exceeded 62 trillion won ($42.02 billion). The gains brought pretax profit to nearly 123 trillion won ($83.36 billion), according to the company’s results.

Cash and cash equivalents totaled 88 trillion won ($59.64 billion) at the end of the second quarter, an increase of 33.6 trillion won ($22.77 billion) from three months earlier.

Borrowings declined by 700 billion won ($474.4 million) to 18.6 trillion won ($12.61 billion), leaving the company with net cash of 69.4 trillion won ($47.03 billion).

SK hynix said its stronger earnings and cash generation had significantly improved its financial position.

The company expects the expansion of AI agents capable of performing complex tasks for users to broaden the market for memory chips.

It said structural changes are driving simultaneous growth in demand for specialized AI memory and conventional memory products.

Major technology companies have also requested additional supplies as they expand investment in AI infrastructure, SK hynix said.

The chipmaker said such investments are increasingly funded by revenue generated through AI services, supporting its expectation that memory demand will continue to grow.

SK hynix has expanded discussions with customers on multiyear agreements intended to secure stable supplies.

The company said it had completed long-term supply negotiations with about 10 customers, including key clients, and was continuing talks with other major companies.

SK Group Chairman Chey Tae-won previously said artificial intelligence company Anthropic had requested cooperation in supplying components needed for chip production.

SK hynix began mass-production shipments of its HBM4 memory during the second quarter and plans to expand production during the second half of the year.

The company said HBM4 achieved the operating speed required by customers while maintaining strong power efficiency and production-cost competitiveness.

SK hynix also completed the delivery of HBM4E samples during the first half of the year. It said the product uses a process designed to provide technological maturity and stable mass production.

The company said it plans to maintain its leadership in high-bandwidth memory through product quality, production yields, supply stability, cost competitiveness and performance.

Sales of SOCAMM2 products increased sharply during the second quarter, while supplies of products using sixth-generation 10-nanometer-class technology also expanded.

In NAND memory, SK hynix plans to accelerate its transition to advanced production processes and strengthen its portfolio of high-capacity and high-performance products.

Its 321-layer NAND products already account for the largest share of production. The company plans to expand them to about half of its domestic production capacity by the end of the year.

SK hynix said the ability to deliver requested volumes on schedule has become a central competitive factor as customer demand continues to exceed industry supply capacity.

The company has moved forward the mass-production schedule for its M15X plant and is investing to rapidly expand capacity after the first clean room at its Yongin semiconductor complex opens in early 2027.

It also plans to proceed gradually with longer-term investments, including the P&T7 advanced packaging plant, the M17 NAND production facility and a new semiconductor cluster.

SK hynix said it would prepare for long-term growth while maintaining disciplined capital spending to strengthen production capacity and financial stability.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: