**Record High Quarterly Performance with HBM’s Support Amidst AI Demand**
**Team Nvidia: SK Hynix and TSMC Thriving, While Samsung Struggles**
(Seoul = Yonhap News) Reporter Kim Aram – As the AI craze intensifies in the semiconductor market, creating a pronounced performance polarization, SK Hynix achieved a record high in the third quarter of this year.
SK Hynix, having early on joined the supply chain of Nvidia, a leader in the AI chip ecosystem, has maintained its technological leadership and significantly benefited from the AI boom.
**SK Hynix’s Operating Profit Surpasses 7 Trillion Won… Samsung DS Estimated at 4 Trillion Won**
On the 24th, SK Hynix announced a consolidated third-quarter operating profit of 7.03 trillion won, representing a 28.6% increase from the previous quarter’s 5.4685 trillion won. This performance far exceeded market forecasts of around 6.8 trillion won, setting a new quarterly record.
Especially notable is that SK Hynix’s operating profit likely surpassed that of Samsung Electronics’ semiconductor division, Device Solutions (DS), the world’s top memory company. This marks the second time SK Hynix has outpaced Samsung’s DS division in a profitable quarter, following the first quarter of this year (SK Hynix: 2.886 trillion won, Samsung: 1.91 trillion won).
Samsung Electronics’ preliminary third-quarter operating profit is reported at 9.1 trillion won, with securities firms estimating that the DS division’s operating profit has decreased over 1 trillion won from the previous quarter’s 6.45 trillion won to around 4 trillion won.
SK Hynix attributed its strong performance to increased sales of high-margin, value-added products, with both DRAM and NAND average selling prices (ASP) rising by the mid-10% range compared to the previous quarter.
Amid prolonged global economic stagnation delaying the recovery of smartphone and PC IT demand, SK Hynix leveraged its dominance in high-performance DRAM, such as High Bandwidth Memory (HBM), to differentiate profitability and protect its earnings despite the downturn.
SK Hynix has established itself as the “HBM stronghold” by virtually monopolizing the supply of HBM used in Nvidia’s GPUs for AI learning and inference. Following the industry’s first shipment of eight-layer HBM3E in March, SK Hynix is also preparing to supply the new twelve-layer product it recently began mass-producing.
Lee Eui-jin, a researcher at Heungkuk Securities, noted that while demand for DRAMs like HBM, DDR, and LPDDR5 remains strong, B2C and general server demand is weak. SK Hynix’s focus on AI-centric high-value demand has led to a continual upcycle driven by ASP increases each quarter.
He added that SK Hynix’s high proportion of DDR5 and HBM reduces exposure to market downturns, and expected the financial impact of the HBM3E 12-layer product to be reflected starting in the fourth quarter.
**The AI Tidal Wave Deepens Wealth Disparity in the Semiconductor Industry**
As evidenced by SK Hynix’s strong performance, recent trends in the global semiconductor industry are heavily influenced by AI. Being part of Nvidia’s supply chain is particularly crucial.
TSMC, the world’s leading foundry (semiconductor manufacturing service), which virtually monopolizes the production of Nvidia AI chips, also achieved record-breaking results in the third quarter. TSMC’s net profit for the quarter surged 54.2% year-on-year to 325.26 billion New Taiwan dollars (around 13.8 trillion won), surpassing market expectations of 300 billion New Taiwan dollars.
TSMC Chairman Wei Zhe-Jia emphasized during their earnings call that “AI demand is real,” observing strong AI demand from customers persistently throughout the latter half of the year.
In contrast, companies that have lost leadership in AI semiconductors, as semiconductor demand shifts towards AI and traditional IT demand remains sluggish, are not standing out. Samsung Electronics is a prime example, having become a follower in the high-demand HBM market led by SK Hynix, while continuing to focus on legacy DRAMs amid declining demand.
Samsung Electronics’ third-quarter performance also fell short of expectations, with HBM not yet holding a significant share in memory sales to drive meaningful turnaround. Although Samsung is aggressively working to develop and commercialize HBM technology, it has not yet entered Nvidia’s supply chain.
Samsung Electronics is currently conducting quality tests to supply its HBM3E 8-layer and 12-layer products to Nvidia, but progress is slower than expected. In releasing the preliminary results, Samsung unusually noted that the commercialization of HBM3E with major customers was delayed more than anticipated.
Furthermore, Samsung Electronics continues to face prolonged poor performance in its foundry sector, competing directly with TSMC. The non-memory division, which includes foundry and system LSI (Logic IC design), is estimated to have recorded losses exceeding 1 trillion won in the third quarter due to poor order intake and low operating rates.
Lee Seung-woo, head of research at Eugene Investment & Securities, remarked that the rich-get-richer, poor-get-poorer trend in the semiconductor industry is becoming more pronounced, with companies that have successfully ridden the AI wave diverging in fate from those that haven’t.