South Korean semiconductor giant SK Hynix said Friday its entire 2024 production of high-end memory chips was sold out and most of next year's line was gone too, reflecting the huge demand for cutting-edge AI hardware.

SK Hynix is the world's second-largest memory chip maker, and dominates the market for high-bandwidth memory (HBM) chips. It is a top supplier to Nvidia, which controls about 80 percent of the global artificial intelligence chip market.

The firm told AFP on Friday that its HBM chips from 2024 had fully sold out.

CEO Kwak Noh-jung said at a news conference Thursday that increased usage of AI devices "will lead to an explosive increase in demand for high-speed, high-capacity and low-power memory chips specialized for AI".

With growing demand, AI hardware components such as HBM chips are expected to account for 61 percent of the company's chip production, said Justin Kim, SK Hynix's head of AI infrastructure, up from just five percent in 2023.

SK Hynix also said this week it would be starting mass production of its top-of-the-line fifth-generation HBM chips in the third quarter.

It announced in April that it would collaborate with Taiwanese semiconductor giant TSMC to make next-generation HBM chips. TSMC also supplies Nvidia.

Thanks to strong sales of AI hardware components such as HBM chips, SK Hynix recorded its second-highest operating profit in the first quarter of this year—2.9 trillion won ($2.1 billion).

Micron, another Nvidia supplier, said in March that its 2024 HBM supply was sold out and it had allocated "the overwhelming majority" of the 2025 output too.

© 2024 AFP