Memory demand outpaces supply

SK Hynix said on April 23 that demand for artificial intelligence memory chips is running ahead of what factories can make, even after the company posted record quarterly profit. (news.skhynix.com) The South Korean chipmaker reported first-quarter revenue of 52.5763 trillion won and operating profit of 37.6103 trillion won, up from 7.4 trillion won a year earlier. Reuters reported the profit increase at 406%, roughly five-fold, for the January-to-March period. (news.skhynix.com) (uk.finance.yahoo.com) The results landed close to analyst forecasts compiled by LSEG, while revenue topped 50 trillion won for the first time in a quarter. CNBC reported SK Hynix shares rose as much as 3.6% in early South Korea trading before turning down 0.9%. (cnbc.com) Memory is the short-term workspace inside an artificial intelligence server, and high-bandwidth memory packs more of that workspace close to the processor so models can move data faster. SK Hynix is the leading supplier of that memory for artificial intelligence data centers, including systems built around Nvidia chips. (cnbc.com) (trendforce.com) That supply squeeze has spread beyond one premium product line. SK Hynix said strong demand also lifted sales of server dynamic random access memory modules and enterprise solid-state drives, while Counterpoint Research said the broader dynamic random access memory market logged 30% quarter-over-quarter growth for two straight quarters as prices rose. (news.skhynix.com) (counterpointresearch.com) SK Hynix said the usual first-quarter slowdown did not happen this year because customers kept spending on artificial intelligence infrastructure. The company also said memory demand is broadening as artificial intelligence shifts from training large models to real-time inference and “agentic AI” services that answer and act continuously. (news.skhynix.com) On its earnings call, an SK Hynix executive said customers are now prioritizing securing supply over negotiating lower prices. The company said it expects favorable pricing to continue in both dynamic random access memory and NAND flash, the two main types of memory chips it sells. (cnbc.com) (news.skhynix.com) The company said cash and cash equivalents rose to 54.3 trillion won at the end of the quarter, up 19.4 trillion won from the prior quarter, while interest-bearing debt fell to 19.3 trillion won. That left SK Hynix with a net cash position of 35 trillion won as it prepares to invest more to expand supply. (news.skhynix.com) The bottleneck is not likely to clear quickly. CNBC reported shortages could persist to 2030 because memory capacity expands slowly, and SK Hynix said it plans to keep rolling out newer products, including HBM, LPDDR6 and 192GB SOCAMM2 modules, to chase demand that is still outrunning supply. (cnbc.com) (news.skhynix.com)