South Korean semiconductor giant SK Hynix reported a remarkable 158% year-on-year increase in operating profit for Q1 2025, reaching 7.44 trillion won (approximately $5.2 billion), surpassing analysts' expectations of 6.6 trillion won. The company also saw a 42% rise in revenue, totaling 17.63 trillion won, marking its second-best quarterly performance to date, just behind the record-breaking figures from Q4 2024.

The surge in SK Hynix's profits was largely driven by the robust demand for high-bandwidth memory (HBM) chips, particularly from the growing artificial intelligence (AI) sector. As a key supplier of HBM for Nvidia, SK Hynix benefited from the strong market appetite for AI-specific components. In fact, the company surpassed Samsung in the DRAM market in Q1 2025, capturing 36% of the global share, while Samsung held 34%. This marked a significant shift, as Samsung had dominated the DRAM sector for over three decades, only to see its operating profit fall below SK Hynix's for the first time in Q4 2024.

According to MS Hwang, Seoul research head at Counterpoint Research, this development is a "wake-up call" for Samsung. SK Hynix's leadership in HBM technology, especially in AI applications, has likely contributed to its stronger-than-expected performance. The company anticipates steady growth in the sales of its 12-layer HBM3E chips, projecting that sales in Q2 2025 will account for more than half of the total HBM3E shipments.

In addition to the growing AI demand, SK Hynix also benefited from increased chip stockpiling in anticipation of potential global trade disruptions, particularly in light of ongoing U.S.-China tensions. This further boosted the company's performance in the first quarter.

Looking ahead, SK Hynix is optimistic about continuing its strong momentum, with plans to expand sales of high-value products such as HBM3E and DDR5 memory modules to meet the evolving needs of the AI and data center industries.