Nvidia supplier SK Hynix offers bullish outlook after record quarterly profit

SEOUL (Reuters) -South Korea's SK Hynix gave a bullish outlook and said it would boost investments next year after posting a record quarterly profit on Wednesday, spurred by an AI boom that has stoked demand for both advanced chips and conventional products. SK Hynix said it has already secured full customer demand for its entire DRAM and NAND production for next year, while planning to start shipping the next-generation HBM4 chips in the fourth quarter of this year. While thriving on a strong market for conventional memory chips, the company wants to maintain its edge in advanced AI chips supplied to Nvidia, in the face of mounting competition from rivals such as Samsung Electronics and Micron. The Nvidia supplier reported an 11.4 trillion won ($8.02 billion) operating profit for the July-September period, up 62% from a year earlier and in line with a forecast by LSEG SmartEstimate. "Demand across the memory segment has soared due to customers' expanding investments in AI infrastructure," SK Hynix said in a statement. SK Hynix expects DRAM shipments to grow by more than 20% year-on-year in 2026. The chip industry's shift to producing high-performance chips, driven by the spending binge on artificial intelligence, has constrained capacity for traditional chips, raising the prospect of a shortage and an extended rise in memory prices, analysts said. Quarterly revenue for the South Korean firm rose 39% in the third quarter to 24.4 trillion won. SK Hynix said it had completed discussions with key customers regarding high-bandwidth memory (HBM) supply for next year, and plans a full-scale sales expansion of HBM4 products next year. Buoyed by its advantage in advanced chips, SK Hynix's shares have surged 200% so far this year, outpacing an 87% gain in Samsung's shares and a 67% gain in the benchmark KOSPI. ($1 = 1,421.4800 won) (Reporting by Heekyong Yang, Hyunjoo Jin and Joyce Lee; Editing by Jamie Freed and Sonali Paul)

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