SK Hynix posts 58% drop in revenue to 5,088 bn won in first quarter

SK Hynix, the world’s second-biggest memory chipmaker, reported 58 percent drop in revenue to 5,088 billion won during the first quarter of 2023.
SK Hynix chip investment in NANDSK Hynix has reported a record quarterly operating loss of 3.4 trillion won ($2.54 billion) in the January-March quarter, versus a 2.9 trillion won profit a year earlier. SK Hynix has also posted net loss of 2,586 billion won during the first quarter.

Losses widened as a global economic slowdown prompted buyers to limit purchases, worsening a chip glut during the first quarter, SK Hynix said.

South Korea’s SK Hynix said production cuts by memory chipmakers will improve market conditions from the second half of 2023.

“As the memory chip downturn continued through the first quarter, the company posted a sequential drop in revenues and widened operating loss on sluggish demand and falling products prices,” SK Hynix said. “But we expect revenues to rebound in the second quarter after bottoming out in the first, driven by a gradual increase in sales volume.”

SK Hynix forecasts an improvement in market conditions from the second half of 2023, as memory inventory levels at customers declined throughout the first quarter, while inventory across the memory industry is expected to improve from the second quarter with production cut by suppliers taking into effect.

SK Hynix expects the growing high-performance server market for artificial intelligence (AI) including ChatGPT and a wider adoption of high-capacity memory products by customers to have positive impact on the market.

SK Hynix plans to focus on the sales of high-performance DRAM products including server DDR5 and HBM, as well as 176-layer SSD and uMCP products in NAND, and plans to maintain investments in high-end memory products that are believed to change the landscape of the memory market, such as chips for AI, even as the company cuts capital expenditure.

SK Hynix will invest for mass production readiness of 1b nanometer DRAM (the fifth generation of 10nm technology) and 238-layer NAND to support a quick business turnaround once the market conditions improve.

“With SK Hynix having secured a top-notch competitiveness for the lineup of products, of which growth in demand is materializing from this year, such as DDR5/LPDDR5 and HBM3, the company will solidify its leadership in the premium market by increasing the sales volume of such products,” said Kim Woohyun, Chief Financial Officer at SK Hynix.