SEOUL, July 29 (AJP) - SK hynix brushed aside growing concerns over a slowdown in artificial intelligence (AI)-related investment on Wednesday, saying demand from major cloud providers would remain strong beyond next year as it reported record quarterly earnings and unveiled plans to spend nearly 50 trillion won (US$35 billion) on capacity expansion.
The world's second-largest memory chipmaker reported a record operating profit of 60.54 trillion won for the April-June quarter, up 68 percent from the previous quarter, while revenue rose 36 percent to an all-time high of 79.21 trillion won, driven by strong demand for high-bandwidth memory (HBM) used in AI accelerators. Its operating margin reached a record 76.1 percent.
Despite the record earnings, SK hynix shares were down 18.8 percent at 1,258,000 won as of 1:43 p.m. in Seoul, as investors weighed the results against mounting concerns over China's rapidly advancing semiconductor industry and elevated market expectations.
During a conference call following the earnings release, SK hynix said concerns over slowing AI infrastructure investment were overstated, arguing that major cloud service providers continue to view AI spending as essential to strengthening their core businesses.
"We view these developments not as a slowdown in AI investment, but as a transition toward improving the utilization and monetization of AI infrastructure built over the past several years," the company said.
The company said improvements in AI model efficiency should broaden AI adoption rather than reduce memory demand, as wider deployment of AI applications is expected to increase overall memory consumption.
"AI infrastructure investment is expected to remain solid beyond next year," it said, adding that temporary delays in some projects due to power supply constraints or slower data-center construction would not alter the long-term growth trajectory.
SK hynix also reaffirmed its aggressive investment plans, saying capital expenditure this year is expected to reach the high-40 trillion won range, one of the company's largest annual investment programs, as it expands production capacity to meet structurally growing AI memory demand.
"Our capacity expansion is based on demand visibility secured through long-term customer partnerships and will be carried out in stages with investment efficiency in mind," the company said, adding that the phased investment approach would help prevent oversupply.
The company said its investment plan reflects confidence in long-term customer demand backed by multi-year supply agreements, while production expansion will remain flexible depending on confirmed customer demand and investment efficiency.
SK hynix also said it has begun volume shipments of 12-layer HBM4, completed sample deliveries of HBM4E for next-generation AI chips and remains on track for mass production in 2027, reinforcing its technology leadership in premium AI memory products.
Despite the sharp share-price decline, the company maintained that long-term demand from hyperscale cloud providers remains intact and said long-term supply agreements with major customers provide sufficient visibility to support continued investment in next-generation AI memory.
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