SK Hynix's Record Profit: A Boon for Nvidia and the AI Chip Market

SK Hynix, a leading memory chip manufacturer, has posted record-breaking profits in Q3 2024, driven by the surging demand for high-bandwidth memory (HBM) chips in the AI market. This remarkable performance is largely attributed to the company's strategic partnership with Nvidia, which has positioned SK Hynix as the primary supplier of essential memory for Nvidia's high-performance AI systems. As a result, SK Hynix's shares have surged by 5% in Seoul, marking the company as one of the top-performing stocks of 2024 in the industry (Source: SK Group Chairman Chey Tae-won and Nvidia Corp. Co-Founder Jensen Huang meeting at CES 2025).

The partnership between SK Hynix and Nvidia has not only accelerated SK Hynix's development of advanced HBM chips but has also expanded the company's focus on AI data centers as a major growth driver for the future. SK Hynix showcased its most advanced HBM chips, including the 16-layer HBM3E, and enterprise data storage solutions tailored for AI data centers at CES 2025, reflecting the company's strategic shift toward becoming a leading player in the global AI technology space (Source: SK Group, 2024).



SK Hynix's record-breaking quarterly performance in Q3 2024 was underpinned by several key factors:

1. Increasing premium product sales: SK Hynix achieved its best-ever quarterly performance due to the increasing sales of premium products, which are more profitable than standard products. This growth was primarily driven by the company's leading AI memory technology.
2. Strong demand for memory in AI servers: The demand for HBM used in AI servers has been surging. In Q3 2024, HBM's share of DRAM revenues reached 30%, and it is forecast to reach 40% in Q4. This strong demand for HBM is a significant contributor to SK Hynix's record-breaking performance.
3. High operating and net margins: SK Hynix reported an operating margin of 40% and a net margin of 33% in Q3 2024, indicating that the company's profitability has significantly improved. These high margins are a testament to the company's ability to optimize its production processes and capitalize on the growing demand for AI-related products.



In conclusion, SK Hynix's record-breaking quarterly performance in Q3 2024 was driven by increasing premium product sales, strong demand for AI server memory, and high operating and net margins. The company's strategic partnership with Nvidia has been instrumental in this success, with both companies benefiting from the explosive demand for AI capabilities. As AI continues to drive innovation across industries, the partnership between these two tech giants places SK Hynix and Nvidia at the forefront of the next wave of AI advancements.