The loss of SK Hynix narrowed sharply in the third quarter, and artificial intelligence chips became life-saving straws.
CTOnews.com, October 26 (Xinhua)-- SK Hynix, the world's second-largest memory chipmaker, said that the boom in artificial intelligence will boost chip profits, and the company's loss in the third quarter was significantly smaller than that of the previous quarter.
The company said on Thursday that strong demand for advanced chips for artificial intelligence had mitigated the impact of continued sluggish demand for common chips used in devices such as smartphones and computers.
SK Hynix said its business, which sells DRAM chips for technology equipment, returned to profit in the third quarter, compared with losses in the first two quarters of this year.
"the DRAM business... is expected to continue to improve with the boom in emerging artificial intelligence," the chipmaker said in a statement. "the NAND flash memory business, which is still losing money, is also showing signs of improvement."
SK Hynix said its third-quarter operating loss was 1.8 trillion won (CTOnews.com Note: currently about 9.756 billion yuan), compared with a profit of 1.7 trillion won in the same period last year.
This is its fourth consecutive quarterly loss, but it is an improvement from 3.4 trillion won in the first quarter and 2.9 trillion won in the second quarter of this year.
SK Hynix's third-quarter revenue fell 18% from a year earlier to 9.1 trillion won.
The memory chip industry has experienced its weakest decline in decades since last year. Analysts said SK Hynix's business of selling NAND flash chips for data storage could lose about Won2,000bn in the third quarter as demand dried up.
However, the demand for SK Hynix advanced DRAM chips, such as high-bandwidth memory (HBM) chips for fast-growing artificial intelligence, is solid. SK Hynix is ahead of its competitors in developing HBM3 chips and acquiring artificial intelligence chip leader Nvidia as a customer.
SK Hynix said that memory chip manufacturers began to reduce the effect of production, customers began to place new orders, chip prices also began to stabilize.
Some analysts expect SK Hynix to turn profitable in the current quarter as device makers such as smartphones and personal computers cope with weak consumer demand and gradually reduce their chip inventories low enough to resume purchasing levels.
