SEOUL - South Korea's SK hynix said second-quarter net profit soared a whopping 1,242 percent year-on-year, driven by the artificial intelligence industry's explosive demand for its advanced memory chips.
SK hynix is a specialist supplier of high-bandwidth memory chips to US industry behemoth Nvidia, and a pillar of South Korea's tech-led economy.
The global race to build data centres hosting AI infrastructure has seen a meteoric rise in the firm's fortunes, despite concern the sector may be overvalued in a market bubble.
Wednesday's earnings figures, including quarterly net profit of 94 trillion won ($64 billion), were described in a statement by the Icheon-headquartered firm as "an all-time high quarterly performance".
"We are aware of concerns that AI infrastructure investment might be slowing down," marketing chief of the AI microchip division Park Joon-deok said on a call with investors and reporters.
He cited jitters over firms exploring data centre rental -- rather than construction -- and the emergence of new high-efficiency AI requiring a lower memory taskload.
"We view these developments not as a scaling back of AI investment, but rather as a process of maximising the utilisation of the massive AI infrastructure built to date and accelerating its monetisation," he said.
Wednesday's report said operating profit between April and June jumped 557 percent from last year to 60 trillion won.
Revenue stood at 79 trillion won, with the differential to the net profit boosted by SK hynix's one-off sale of its 20 trillion won stake in flash memory maker Kioxia -- another beneficiary of the AI boom.
SK hynix said it intends to make investments in the 40 trillion won range this year.
Growth was attributed to expanding investments in AI infrastructure as the technology evolves into more complex forms requiring more high-bandwidth memory capacity.
"With major tech companies increasing their AI infrastructure investments, additional supply requests continue to mount," the company said in a statement.
"As these investments are supported by revenue generated from AI services, the momentum in memory demand is expected to persist."
- by Jihye Shin (AFP)