Huge investments from governments and major technology companies are driving frenzied demand for the hardware that powers generative AI tools.

The South Korean firm posted net profit of 40.3 trillion won (US$27.2 billion) in the first quarter, up nearly 400% year-on-year.

The figure smashed estimates of 29.4 trillion won in a Bloomberg analyst survey.

Revenue surpassed 50 trillion won for the first time in a single quarter, while operating profit nearly doubled compared to the previous three-month period.

“Despite the fact that first quarter is typically a seasonal downturn, strong demand persisted due to expanded investments in AI infrastructure,” SK hynix said.

“As AI evolves from large model training to the stage of agentic AI, which repeatedly performs real-time inference across various service environments, the foundation for memory demand is expanding,” the company said, adding that it would roll out new products to meet it.

The AI boom has pushed up prices and shipments of conventional memory semiconductors, while demand for high-bandwidth memory chips, used in AI servers, has soared.

That has caused SK hynix shares to skyrocket by around 600% over the past year — helping push Seoul’s benchmark Kospi stock index to record highs.

SK hynix is increasing its chipmaking capacity and plans to spend 19 trillion won to build a new factory in South Korea’s Cheongju.