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For decades, the business of making memory chips had been the digital equivalent of mining raw materials. Production required enormous investments in expensive factories, while prices swung through boom-or-bust cycles. The hope was that, over time, the good years would outnumber the bad.
The glamour and lofty profits in the semiconductor industry lay in the data-processing brains of computers, not the memory chips that stored and transported data.
But artificial intelligence, with its nearly limitless appetite for training data, has transformed the stature and profitability of the memory business beyond recognition. No company reflects that dramatic shift more than SK Hynix, the leading producer of high-speed memory, a crucial A.I. technology.
And no company has been more exposed to the wild stock-market gyrations that have roiled A.I. companies in recent weeks. Hynix has been a focal point for investor concerns over the seemingly runaway costs of Silicon Valley tech giants building A.I. data centers and worries over tougher competition from China. If A.I. investment slows, Hynix appears especially vulnerable.
Hynix shares have been battered in the A.I. sell-off this week, and are down about 50 percent from their recent high. Yet the stock has more than doubled so far this year. This month, Hynix raised $26.5 billion in a U.S. share sale, the largest ever by a foreign company.
Hynix reported quarterly results on Wednesday that underscored how much the A.I. boom is lifting the South Korean chipmaker. Its revenue more than tripled from the previous year to roughly $54.5 billion, while operating profit jumped 557 percent.
