SK hynix tops Samsung in quarterly profit for first time

SK hynix has beaten its biggest rival Samsung Electronics for the first time ever in terms of quarterly profit, data showed Tuesday, as its AI memory chip sales propelled its fourth-quarter earnings to a record high. SK hynix posted 8.08 trillion won ($5.62 billion) in operating profit for the October-December period, up 15% from a year ago, according to its earnings report.

Samsung Electronics estimated its fourth-quarter operating profit at 6.5 trillion won, including 3 trillion won from the semiconductor division. It hasn’t released its final earnings yet, according to reports.

It’s the first time SK hynix has outpaced Samsung Electronics, which has a broad business portfolio including home appliances, mobile devices and semiconductors, in quarterly operating profit.

For 2024, SK hynix’s annual operating profit was 23.47 trillion won, while Samsung Electronics’ chip division is expected to earn around 15 trillion won.

SK hynix’s strong performance was driven by robust demand for premium high bandwidth memory (HBM) chips in the generative AI era despite weak demand for conventional memory chips used in smartphones and PCs.

SK hynix has been the HBM leader since it started supplying HBM to Nvidia Corp (NASDAQ:NVDA), whose GPUs are key to AI computing.

In the fourth quarter, HBM accounted for over 40% of the company’s DRAM sales, up from 30% in the previous quarter.

"SK hynix has a portfolio of higher value-added products than its competitors, making it less affected by market downturns," said Ryu Young-ho, an analyst at NH Investment & Securities Co.

Samsung Electronics, the world’s top memory chipmaker, hasn’t been able to increase its profit as its HBM is not yet in the market.

SK hynix is supplying almost all its HBM to Nvidia so it will be the leader for a while.