Despite posting a record 158% increase in quarterly profit for the March quarter, South Korean random access memory (RAM) manufacturer SK Hynix has warned of demand volatility due to tariff measures.
The Nvidia supplier posted revenue of 17.64 trillion won (US$12.36 billion), up about 42% compared with the same period a year earlier, while operating profit surged a whopping 158% year-on-year.
In signs that market conditions are losing their stability, revenue dropped 11% quarter-on-quarter, as profit dropped 8% from a record high in the December quarter.
SK Hynix supplies semiconductor memory that’s found in servers, PC’s and data stores and with tariff policies aimed at the industry, volatility in demand may impact earnings results for the rest of the year.
“While reciprocal tariff measures between some countries are currently suspended, there are growing concerns that tariffs can be applied to semiconductor products,” an SK Hynix executive said.
The memory maker's concerns over tariffs are well-founded enough for South Korea to want to step in and help its domestic industry.
Earlier this month, its government announced a 33 trillion won (A$36.42 billion) support package for its semiconductor industry, upping a package it revealed last year by 25%.
Find out more: Tariff fear: US probes pharma, semiconductor industries
Product focus
The company said it maintains its forecast that HBM demand will about double compared to last year.
“As a result, sales of 12-layer HBM3E are expected to favourably increase to account for over 50% of total HBM3E revenues in the second quarter,” the company said.
For NAND, SK Hynix plans to actively respond to demand for high-capacity eSSD’s, with a cautious approach towards investment.
“In compliance with the ‘Capex Discipline’, SK Hynix will focus on products with demand feasibility and profitability to enhance investment efficiency,” Chief Financial Officer Kim Woohyun said.
“As an AI memory leader, we will strengthen collaboration with partners and carry out technological innovation in efforts to continue profit growth with industry-leading competitiveness.”
SK Hynix shares have slid 15% in the last month to trade for 178,200 won.
