SK Hynix, one of the world's largest memory chipmakers, cited semiconductor demand uncertainties for 2025 as Nvidia (NVDA, Financial) faces votatility in premarket trading Friday.
Key supplier of memory chips for Nvidia GPUs for AI applications, SK Hynix, sounded a note of caution about future demand. Although the company still sticks to its key long-term outlook of 2025, CFO Woo-Hyun Kim mentioned on a post-earnings call Thursday that it could be hit by risks such as inventory adjustments at PC and smartphone OEMs, trade protectionism and geopolitical risks.
Nvidia bounced back from comments like these, bouncing up to close the Thursday session off flat and down as much as 2% after the comments from them.
The semiconductor sector is continuing to feel pressure from inventory corrections and global economic uncertainties. Tensions are still high over geopolitics and shielded trade, according to analysts. Demand has soared in recent years on the back of artificial intelligence and cloud computing, but the industry's recovery looks fragile.
SK Hynix's cautions seem to indicate that the cyclic nature of memory chip suppliers would always remain fragile in terms of demand swings. However, with the company's stock outperforming the estimates, the company's cautious outlook meshes with worries affecting the industry.
