SEOUL, July 24, 2025 (BSS/AFP) - South Korean chip giant SK hynix reported record quarterly profits Thursday thanks to soaring demand for artificial intelligence.

The world's second-largest memory chip maker dominates the market for high-bandwidth memory (HBM) semiconductors and is a key supplier for US titan Nvidia.

The firm said operating profit climbed almost 70 percent to 9.2 trillion won ($6.7 billion) in the second quarter, with revenues coming in at 22.2 trillion won -- both all-time peaks.

It comes after Taiwan chip giant TSMC last week announced a surge in net profit for the second quarter, topping forecasts, thanks to robust demand for AI technology, despite the threat of US tariffs on the critical sector.

SK hynix also said net profit was up close to 70 percent on-year, at nearly seven trillion won.

"Aggressive investment by global big tech companies into AI led to a steady increase in demand for AI memory," it said in a statement.

Shipments of DRAM and NAND flash -- other types of computer memory -- topped forecasts, boosting the bottom line.

"SK hynix foresees that increasing competition among big tech companies to enhance inference of AI models would lead to higher demand for high-performance and high-capacity memory products," the company added.

Shares in the firm rose more than three percent in Seoul but pared gains to close up 0.2 percent.

"Nvidia suppliers like SK hynix will continue to enjoy strong demand in the coming months and years for memory chips due to the high memory content needed to make AI chips functional," G. Dan Hutcheson of TechInsights told AFP.

Rising competition from rivals is its main risk factor, along with "saturation of the market as AI algorithms become more efficient as well as the uncertain impact of tariffs, the global trade war, and the resultant potential for a global recession", he said.

South Korea is a major exporter to the United States and its powerhouse semiconductor and auto industries would suffer greatly under President Donald Trump's threatened 25 percent tariffs.

Experts attribute SK hynix's resilience to its growth in the DRAM market.

The firm took the lead in DRAM revenues in April, with a 36 percent market share, according to research firm Counterpoint. That surpassed South Korean rival Samsung for the first time -- the first change in the top spot in more than four decades.

SK hynix said in a conference call that "the previous quarter began amid concerns over slowing demand due to trade tensions and broader economic uncertainty".

But as the United States has been threatening restrictions on semiconductor sales to China, customers' preemptive purchases "to hedge against external risks" created a "more favourable environment" than expected, an SK hynix official said.

The company added that despite the geopolitical situations, its production situation saw "no change".