SK Hynix, a supplier for Nvidia, has reported record results for the first quarter, including a nearly five-fold jump in net profit. The company posted an operating profit of 37.6 trillion won (S$32.4 billion) for the January-March period, up from 7.4 trillion won a year earlier. This surge in profit and revenue comes as prices for its products continue to rise amid strong global demand for artificial intelligence memory chips.
The company forecast that AI chip demand will exceed its manufacturing capacity, allaying concerns about slowing AI spending by big tech firms. Underscoring the surging prices of memory chips that underpin global artificial intelligence development, SK Hynix reiterated plans to increase its capital expenditure significantly this year.
To meet the rising global demand for AI memory, SK Hynix plans to invest 19 trillion won ($12.85 billion) in a new manufacturing plant for advanced packaging in South Korea. Construction on the facility is scheduled to begin this month.