South Korea’s chipmakers are raking it in. Can China close the gap?

South Korean memory chip giant SK Hynix kept almost 80 per cent of its total sales as operating profit last quarter, a margin almost unheard of in manufacturing, as the country’s chipmakers reap the rewards of the global artificial intelligence boom.

Operating profit, defined as earnings from the company’s core business before interest and taxes, soared 632 per cent in the three months to September from a year earlier to 83.33 trillion won (US$62.76 billion) on revenue of 104.62 trillion won, SK Hynix reported on Wednesday – marking its sixth consecutive record quarter.

Analysts had expected the company to report an operating profit of about 77 trillion won. Its operating margin, or the share of revenue left as operating profit, was 79.7 per cent in the third quarter, up from 72 per cent in the first and 76.3 per cent in the second.