Investing.com-- South Korea’s SK Hynix Inc (KS:000660) on Thursday clocked a stronger-than-expected third-quarter profit as the memory chip giant saw strong sales of its advanced chips for use in artificial intelligence applications.

The firm, which is a major supplier to AI darling NVIDIA Corporation (NASDAQ:NVDA), posted an operating profit of 7.03 trillion won ($5.07 billion) for the three months to September 30, more than Reuters estimates for a profit of 6.8 trillion won. SK Hynix had logged a 1.8 trillion won loss last year.

SK Hynix’s revenue nearly doubled to 17.57 trillion won. The firm said that demand for memory from the AI sector, especially in data centers, was a major driver of its earnings.

The firm has been one of the biggest beneficiaries of the AI boom over the past year, given that it makes the most advanced high-bandwith memory chips that are used in AI chipsets. It is also the world's second-largest memory chip maker by volume, behind Samsung Electronics Co Ltd (KS:005930).

HBM sales surged 70% from the prior quarter and were up 330% from last year, SK Hynix said.

Nvidia is a key source of this demand, with SK Hynix largely outpacing rivals Samsung and Micron Technology Inc (NASDAQ:MU) in recent quarters on this trend.

The firm had in September said it had started mass production of its latest generation of HBM chips, which are the most advanced memory chips available in the market.

Shares of the firm were trading up nearly 38% so far in 2024, although they were off record highs hit earlier in the year.

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