SK Hynix Inc (KS:000660) reported a more than fivefold increase in operating profit in the first quarter on Thursday, beating market expectations as the South Korean memory chip maker significantly benefited from the rising demand for artificial intelligence.

SK Hynix's operating profit surged by 405% year-over-year to a record 37.61 trillion won ($25.42 billion) for the three months ended March 31, the company stated.

Revenue surged nearly 200% to 52.58 trillion won.

The company, one of the largest memory chip producers globally, stated that it continues to benefit from the excessive demand for AI memory as more global companies build infrastructure to support this technology.

Memory chip prices have skyrocketed over the last two quarters as excessive demand for AI has triggered a supply crunch in this sector. The key driver of this trend has been high-bandwidth memory, with SK Hynix and its competitors signaling a pivot in production towards HBM products to satisfy the AI-driven demand.

The company is a key supplier for NVIDIA Corporation (NASDAQ:NVDA) and announced on Thursday that it expects further price increases for memory in the upcoming quarters.

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