The increase in profit for SK Hynix demonstrates that the need for AI continues to be robust. SK Hynix initially started providing Nvidia with HBM chips in 2022.

The South Korean memory manufacturing company, SK Hynix, bounced back into profit in the first quarter, following the previous year’s slump, supported by the surge in AI.

On Thursday, the firm announced that its operating profit for the first quarter, from January to March, was 2.88 trillion won. This exceeded the predictions of South Korean analysts by nearly 40%. The company’s income also soared by 144.3% to 12.42 trillion won, indicating robust sales of memory chips in all categories.

SK Hynix serves as the primary provider of high-bandwidth memory (HBM) for Nvidia’s AI chip platform. The structure of HBM involves stacking multiple DRAM dies vertically, which grants the fast speed required by AI chips.

AI services like ChatGPT are becoming increasingly popular, leading to an increased need for memory chips in the servers that support them. Similarly, Samsung is experiencing a surge in demand, predicting a 900% rise in profit for the same quarter.

SK Hynix reported a surge in product sales for AI servers, as well as a substantial demand for premium embedded solid-state drives. This has led to a profitable turnaround for its NAND business.

SK Hynix has announced intentions to expand their customer base for HBM3E, a product that has been in production since March. Additionally, they will be concentrating on other advanced DRAM products like DDR5, which are targeted towards servers.

The firm recently declared its intention to invest more than 20 trillion won ($14.5 billion) in the construction of a new chip manufacturing plant, known as M15X. This facility, situated in Cheongju, South Korea, is specifically designed for DRAM production and is expected to commence large-scale production in 2025.