The Korean memory chip manufacturer SK Hynix achieved a new profit record in the fourth quarter. Nevertheless, the share price is falling because an uncertain outlook for 2025 is causing uncertainty. The details.
Sales in the fourth quarter rose by 75 percent year-on-year to 19.77 trillion won (13.3 billion euros). Operating profit rose by 2,236 percent to 8.08 trillion won (5.4 billion euros). SK Hynix thus exceeded the expectations of analysts, who had expected an operating profit of 8.02 trillion won.
The strong performance is due to the rising demand for AI servers and the increasing use of generative AI models. As a key supplier to US chip designer Nvidia, SK Hynix was able to benefit from this boom. "Thanks to our world-leading HBM [High Bandwidth Memory] technology and a strategy focused on profitability, we have reached an all-time high," the company explained.
Uncertainty for 2025 weighs heavily
Despite the record results, CFO Kim Woohyun warned of potential challenges. An adjustment of inventories at PC and smartphone manufacturers, geopolitical tensions and protectionist trade policies could affect demand in 2025. This has caused concern among investors about a possible market downturn.
At the same time, SK Hynix remains optimistic about the long-term growth potential. According to forecasts, DRAM demand will grow in the mid to high double-digit percentage range in 2025, while NAND chips could achieve a single-digit growth rate.
The share lost almost six percent at times on the Frankfurt Stock Exchange on Thursday morning and is currently trading at 148 euros (as at 23.01, 10:00 a.m.).
New market for memory chips
"The memory chip industry is changing from a volume- and price-driven mass market to a quality-oriented specialty market," explained a company spokesperson. This shift towards high-performance, customized products could secure stable margins in the long term.
SK Hynix's share price has risen by 29 percent since the beginning of the year. Analysts such as SK Kim from Daiwa Capital Markets emphasize that the company will maintain its leading role in the HBM (High Bandwidth Memory) segment despite possible market corrections.
