Investing.com– Nvidia supplier SK Hynix Inc (KS:000660) posted a sharp increase in its fourth-quarter profit on Thursday, as the memory chip maker benefited from increased demand for high-end chips from the artificial intelligence industry.
Operating profit surged 2,236% to a record-high 8.08 trillion won ($5.64 billion) in the three months to Dec 31, slightly above Reuters estimates of 8 trillion won. This was on a 75% jump in revenue to 19.77 trillion won.
The company is the second-largest maker of memory chips in the world, and beat out rivals Samsung Electronics Co Ltd (KS:005930) and Micron Technology Inc (NASDAQ:MU) in bringing advanced high-bandwith memory (HBM) chips into production over the past year.
HBM chips a key component of AI processors, with SK Hynix serving as a major supplier to AI giant NVIDIA Corporation (NASDAQ:NVDA). The company has greatly benefited from a ramp-up in AI demand over the past two years, with its investments in increased capacity and advanced chip production now bearing fruit.
SK Hynix said that demand for HBM and server memory will continue to increase amid rapidly growing AI development across the globe, and that it plans to expand HBM supply to meet this demand.
SK Hynix shares rose sharply this week after U.S. President Donald Trump announced $500 billion in private investment over the next four years to build new AI infrastructure in the U.S. OpenAI and SoftBank Group Corp. (TYO:9984) will lead the venture, with tech majors including Nvidia, Oracle (NYSE:ORCL), Microsoft (NASDAQ:MSFT) and Arm serving as the lead initial technology partners.