The Tamesis
South Korean chip giant SK Hynix is riding the artificial intelligence boom, with fourth-quarter profits more than doubling.
The chipmaker, which supplies Nvidia, reported a 137% increase in operating profit on Wednesday to more than 19 trillion won ($13.5 billion). The amount beat expectations by 8.5% and helped its shares rise a further 9% in after-hours trading.
Huge demand for AI and AI chips has pushed up the price of memory chips, causing Hynix shares to rise about 30% this year.
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The company makes high-bandwidth memory (HBM) chips used in artificial intelligence chipsets for designers such as Nvidia, and reportedly holds more than half of the market.
Sales of these chips doubled last year, and Hynix is now focusing on next-generation HBM.
Demand for DRAM and NAND chips used in personal computers, servers and mobile phones has also grown significantly. But the company expects higher prices to likely curb growth in these sectors.
A big catalyst for SK Hynix and other chipmakers is the rush to build artificial intelligence data centers.
The company also said it would cancel 12.2 trillion won worth of treasury shares (just over 2% of its total outstanding shares), a move that would boost the value of its remaining shares.
U.S. strategic investment
It also said it would invest $10 billion in a new U.S. company, currently referred to simply as “AI Company” and focused on strategic investments in U.S. AI companies.
It plans to do this by restructuring its California-based subsidiary Solidigm, which has been making SSDs since 2021, CNBC reports.
Hynix is building a $3.9 billion chip packaging plant and research facility in Indiana that is expected to begin operations in two years. In addition, it has committed nearly $13 billion to build an advanced chip packaging plant in South Korea.
Relations between Washington and Seoul have been a bit tense lately, with U.S. President Donald Trump Trump warns of raising tariffs on South Korean exports If parliament does not soon approve the trade deal negotiated with President Lee Jae-myung.
That led Lee Myung-bak’s top policy officer to hold an emergency meeting in Seoul on Tuesday and announce plans to visit the United States soon to meet with U.S. trade chiefs at the White House.
The ruling Democratic Party also stated that it would A bill approving the deal will be passed next month (February).
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