SK Hynix's 1H24 revenue soars in US and China, driven by AI demand

SK Hynix, which recorded its best performance ever in the first half of 2024, has experienced remarkable growth in the US and Chinese markets. The company managed to revitalize several of its previously unprofitable businesses, with China and the US now contributing 29.8% and 55.4% of its total revenue, respectively.

Analysts credit this outstanding performance to the surge in prices and shipments of DRAM and high bandwidth memory (HBM), fueled by the booming demand for AI technologies.

According to SK Hynix's semi-annual report, as cited by South Korean media outlets ChosunBiz and Aju News, the company's total revenue for the first half of 2024 reached KRW28.85 trillion (US$21.6 billion). China and the US accounted for 29.8% and 55.4% of this total, respectively.

SK Hynix's revenue in China surged to KRW8.60 trillion in the first half of 2024, compared to KRW3.88 trillion in the same period of 2023. Notably, the company's US revenue experienced an even more dramatic increase, nearly tripling from KRW5.46 trillion to KRW15.97 trillion.

The significant growth in SK Hynix's US revenue is primarily attributed to the recovery of the memory market and the increasing demand from large US tech companies driven by the expansion of the AI market.

The rise in prices for DRAM and NAND Flash products, coupled with increased sales of HBM and enterprise-grade solid-state drives (eSSDs), has positively impacted SK Hynix's performance.

In the first half of 2024, SK Hynix reported DRAM and NAND revenues of KRW18.19 trillion and KRW9.59 trillion, respectively. This represents a substantial increase from the same period in 2023, with DRAM revenue rising by over KRW10 trillion and NAND revenue growing by around KRW5.60 trillion. The notable increase in DRAM revenue is primarily attributed to higher shipments and increased demand for next-generation products such as HBM and DDR5.

SK Hynix CFO Kim Woo-hyun stated in late July that the profitability of general-purpose DRAM has improved rapidly due to rising prices, and the significant increase in sales of HBM3E products has contributed to the growth in DRAM revenue.

Moreover, the continued increase in the average selling price (ASP) of NAND since the fourth quarter of 2023, along with the expansion of sales centered on eSSDs and a profit-oriented operational strategy, has also improved NAND's profitability.

SK Hynix currently operates a DRAM factory in Wuxi, China, a packaging factory in Chongqing, and a NAND factory in Dalian, which was acquired from Intel. According to the company's semi-annual report, the DRAM factory in Wuxi, China, recorded revenue and net profit of KRW2.66 trillion and KRW119.4 billion, respectively, in the first half of 2024. This represents an increase of approximately KRW285 billion compared to a net loss of KRW165.6 billion in the same period of 2023.

Source: SK Hynix, August 2024