ICHEON, South Korea, March 27 (Reuters) – South Korea’s SK Hynix, the world’s second-largest memory chipmaker, announced on Thursday that some customers have expedited their orders ahead of potential U.S. tariffs on semiconductors. During the company’s annual shareholder meeting, Lee Sang-rak, SK Hynix's Head of Global Sales and Marketing, stated that this “pull-in” effect, along with reduced customer inventory, has recently created favorable market conditions. However, he cautioned that it remains uncertain whether this trend will continue.

In January, SK Hynix projected a 10% to 20% decline in shipments of DRAM and NAND flash memory chips in the first quarter compared to the previous quarter. Meanwhile, chipmakers Micron, SanDisk, and China's YMTC have increased memory chip prices, partly due to strong AI-driven demand, according to media reports. These companies were unavailable for comment.

U.S. President Donald Trump announced in February his intention to impose tariffs of approximately 25% on semiconductor imports and other products. A Nomura report suggested that fears of potential U.S. semiconductor tariffs in April have led to preemptive shipments to the United States. The report warned that if these tariffs materialize, they could push product prices higher and weaken demand.

As a key supplier to AI chip giant Nvidia, SK Hynix anticipates a sharp rise in demand for high-bandwidth memory (HBM) chips this year, driven by increased data center investments, CEO Kwak Noh-Jung told shareholders. The company expects HBM sales to more than double in 2024, with its 2025 sales already sold out. Additionally, it aims to finalize customer agreements for 2026 sales within the first half of this year to enhance revenue stability.

Concerns over a slowdown in AI hardware investment arose in January after Chinese startup DeepSeek claimed to have developed AI models on par with Western competitors at a lower cost. However, Nvidia recently reaffirmed steady AI chip demand. Kwak suggested that DeepSeek's presence could ultimately benefit SK Hynix by boosting long-term AI memory chip demand, adding that it would not hinder the need for high-performance accelerators or HBM chips. As of 0446 GMT, SK Hynix shares were down 2.8%, while South Korea's KOSPI index fell 1%.

Disclaimer: This image is taken from Reuters.