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(Bloomberg) -- SK Hynix Inc.’s shares slid after record quarterly results failed to impress investors grappling with stagnant smartphone demand and questions about AI spending in 2025.
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Nvidia Corp.’s main supplier of high-bandwidth memory reported a more than 20-fold jump in December-quarter operating profit to 8.08 trillion won ($5.6 billion) — eclipsing rival Samsung Electronics Co.’s earnings for the first time. But the stock slid more than 2% after investors cashed out of a 30% share rally this year.
SK Hynix’s scorching growth underscores the extent of a global boom in datacenter spending, and the company’s place at the forefront of the HBM chips that Nvidia accelerators need to train AI. It may also help assuage concerns that an AI-fueled spending spree by Big Tech companies from Microsoft Corp. to Meta Platforms Inc. has peaked.
This week, SoftBank Group Corp., OpenAI, Oracle Corp. and Abu Dhabi-backed MGX unveiled a $100 billion venture to bankroll and build datacenters. News of the Stargate project, promoted by President Donald Trump, fueled a rally in industry players from Nvidia to Arm Holdings Plc as investors anticipated a surge in datacenter construction.
SK Hynix said it expects HBM sales to more than double this year. The South Korean company also boosted its annual dividend by 25% to 1,500 won a share.
“SK Hynix will be a big beneficiary” of Stargate, said Sanjeev Rana, an analyst at CLSA Securities Korea. “They have a significant lead, whether in terms of product quality or production yields...It will take some time for competitors to catch up.”
Well ahead of Samsung and Micron Technology Inc. in designing and supplying HBM, SK Hynix said it now plans to ship cutting-edge 16-layer HBM4 chips in the second half of 2026. The company, which said capital spending would increase slightly this year, needs to stay ahead of Samsung.
HBM made up 40% of its overall DRAM chip revenue in the quarter. Demand for such high-end memory will continue to increase as investment in AI servers expands and inference — making predictions from data — grows in importance, the company predicted.
And while smartphone demand — even for Apple Inc.’s iPhone — remains muted, the Korean firm expects sales of PCs and devices equipped with AI features to expand, fueling a second-half pickup.