By Heekyong Yang and Joyce Lee
SEOUL, April 23 (Reuters) - South Korea's SK Hynix posted a more than five-fold jump in first-quarter operating profit to a record on Thursday, as the artificial intelligence boom drove strong demand for both advanced and conventional memory chip products.
The strong results underscore continued momentum in the global memory chip market, as demand from Big Tech companies to build AI data centres has constrained chip supplies and pushed up prices of both high-end and commodity
memory chips.
"As AI evolves from large model training to the stage of agentic AI, which repeatedly performs real-time inference across various service environments, the foundation for memory demand is expanding across both DRAM and NAND flash," SK Hynix said in a statement.
Contract prices for certain DRAM chips jumped nearly 83% in the first quarter from the previous quarter, while prices for some NAND products soared around 160%, according to data from market tracker TrendForce.
It expects memory chip prices to rise further in the current quarter, signaling another quarter of robust earnings growth, as AI firms race to secure advanced chips needed for their infrastructure rollouts.
Some analysts expect the pace of price increases to ease after the second quarter, but constrained supply would continue until new production capacity comes on line which can take more a year after construction begins.
SK Hynix said it expects a favourable pricing environment to continue "for the time being," as AI-driven demand offsets softer chip demand from PC and smartphone makers.
The Nvidia supplier reported a 37.6 trillion won ($25.42 billion) operating profit for the January-March period, up from 7.4 trillion won a year earlier.
That was in line with a 37.9 trillion won forecast by LSEG SmartEstimate, which is weighted toward analysts who are more consistently accurate.
Quarterly revenue rose 198% to 52.6 trillion won.
($1 = 1,478.8600 won)
(Reporting by Heekyong Yang and Joyce Lee; Editing by Miyoung Kim, Chris Reese and Stephen Coates)
