SK Hynix, a major South Korean memory chip maker, reported a 158% increase in operating profit for March, reaching 7.44 trillion won (approximately $5.2 billion), surpassing expectations of 6.6 trillion won. Revenue also rose by 42%, marking the company's second-best quarterly performance. The surge is attributed to strong demand for AI components, particularly the 12-layer HBM3E chips, which are expected to significantly boost second-quarter sales.
Despite these impressive figures, analysts warn of underlying risks. Morgan Stanley analyst Shawn Kim highlights that the true impact of tariffs on memory chips is like an iceberg, with most dangers hidden beneath the surface. SK Hynix has also cautioned about macroeconomic uncertainties affecting demand in the latter half of the year, though it anticipates a doubling of HBM demand by 2025 due to pre-arranged supply agreements with clients.
Since the beginning of the year, SK Hynix's stock price has risen by only about 4%, with concerns over tariff-induced global economic downturns and profitability reassessments due to low-cost models like DeepSeek. Short selling of SK Hynix shares reached record levels, with sell-offs by foreign institutional investors also hitting unprecedented highs.
