SK hynix Announces 1Q24 Financial Results

Rhea-AI Summary

SK hynix Inc. reported impressive 1Q24 financial results with revenues reaching 12.43 trillion won, operating profit at 2.886 trillion won, and net profit at 1.917 trillion won. The company saw a significant increase in sales of AI server products, leading to a 734% jump in operating profit. The NAND business also experienced a turnaround with rising eSSD sales and product prices. SK hynix plans to strengthen its position in the memory market by focusing on AI memory technology, introducing new products, and expanding production capacities.

Positive

• SK hynix achieved record-breaking revenues of 12.43 trillion won in 1Q24, marking an all-time high for the first quarter.
• Operating profit reached 2.886 trillion won, the second-highest for 1Q results, showing a 734% increase compared to the previous quarter.
• Net profit stood at 1.917 trillion won, showcasing a strong financial performance and a clear rebound for the company.
• The sales of AI server products contributed significantly to the surge in operating profit, driven by the company's leadership in AI memory technology including HBM.
• The NAND business witnessed a turnaround with a rise in eSSD sales and product prices, indicating a positive trend in the market.
• SK hynix plans to focus on increasing supply volume of HBM3E in the DRAM space and launching new products like 32Gb DDR5 to strengthen its position in the high-capacity server DRAM market.
• The company will optimize its NAND business by increasing sales of high-performance eSSD and launching new products to meet market demands.
• SK hynix will expand its production capacities with investments in new facilities like the M15X fab in Cheongju, North Chungcheong Province.
• The overall capital expenditure for the year is expected to be higher than initially planned, reflecting the company's commitment to meeting customer demand and enhancing financial soundness.
• Chief Financial Officer Kim Woohyun emphasized the company's focus on providing industry-leading products and maintaining profitability to drive financial improvement.
• The 1Q24 financial results demonstrate SK hynix's strong performance and strategic initiatives to capitalize on the growing demand for memory products.

Negative

• None.

• Revenues at 12.43 trillion won, operating profit at 2.886 trillion won, net profit at 1.917 trillion won
• 1Q revenues all-time high, operating profit 2^nd highest for 1Q result
• NAND turns around on rise in eSSD sales, product prices
• To continue to work towards improving earnings with leadership in AI memory

SEOUL, South Korea, April 24, 2024 /PRNewswire/ -- SK hynix Inc. (or "the company", www.skhynix.com) announced today that it recorded 12.43 trillion won in revenues, 2.886 trillion won in operating profit (with an operating margin of 23%), and 1.917 trillion won in net profit (with a net margin of 15%) in the first quarter.

With revenues marking an all-time high for a first quarter and the operating profit a second-highest following the records of the first quarter of 2018, SK hynix believes that it has entered the phase of a clear rebound following a prolonged downturn.

The company said that an increase in the sales of AI server products backed by its leadership in AI memory technology including HBM and continued efforts to prioritize profitability led to a 734% on-quarter jump in the operating profit. With the sales ratio of eSSD, a premium product, on the rise and the average selling prices rising, the NAND business has also achieved a meaningful turnaround in the same period.

SK hynix forecasts the overall memory market to be on a steady growth path in coming months as demand for AI memory continues to rise, while the market for the conventional DRAM also starts to recover from the second half. Industry experts believe that inventories both at suppliers and customers will decrease as an increase in production of premium products such as HBM requires higher production capacities than conventional DRAM, resulting in a relative reduction in conventional DRAM supply.

In the DRAM space, the company plans to increase supply volume of HBM3E, of which mass production has started in March for the first time in the industry, while expanding the customer base. The company will also introduce 32Gb DDR5 products based on the 1bnm process, the fifth generation of the 10nm technology, within this year to strengthen its leadership in the high-capacity server DRAM market.

For the NAND business, SK hynix will seek product optimization to sustain the trend of earnings recovery. SK hynix will aggressively increase the sales of both high-performance 16-channel eSSD, an area where the company has a technological edge, and QLC-based high-capacity eSSD by its U.S. subsidiary Solidigm. It will also launch the fifth generation of the PCIe cSSD for AI PCs at an early time in order to respond to market demands with an optimized product lineup.

*QLC(Quadruple Level Cell): NAND Flash products are categorized into single, multi, triple, and quadruple level cells depending on the number of information (in bit unit) contained in a single cell. QLC contains four times more data than a single level cell, facilitating realization of high capacity and raising cost efficiency

Separately, SK hynix announced a day earlier that it will accelerate the process to build the M15X fab in Cheongju, North Chungcheong Province, to expand DRAM production capacities.

Aside from the M15X fab, the company will also carry out investments in advanced packaging facilities in Indiana and the Yongin Semiconductor Cluster as planned over the longer term.

With sizeable investments planned, the overall capital expenditure for this year is expected to be larger than initially planned at the beginning of 2024. In addition to the plan to increase investment to meet rising customer demand, SK hynix will also boost supply of conventional DRAM in line with market trend, which it expects to lead to a steady growth of the global memory market and an improved investment efficiency and financial soundness of the company.

"With the industry's best technology in the AI memory space led by HBM, we have entered a clear recovery phase," Chief Financial Officer Kim Woohyun said. "We will continue to work towards improving our financial results by providing the industry's best performing products at a right time and maintaining the profitability-first commitment."

• 1Q24 Financial Results (K-IFRS)

				*Unit: Billion KRW
	1Q24	QoQ		YoY
		4Q23	Change	1Q23	Change
Revenues	12,429.6	11,305.5	10 %	5,088.1	144 %
Operating Profit	2,886	346	734 %	-3,402.3	Turn to profit
Operating Margin	23 %	3 %	20%P	-67 %	90%P
Net Income	1,917	-1,379.5	Turn to profit	-2,585.5	Turn to profit

 

About SK hynix Inc.

SK hynix Inc., headquartered in Korea, is the world's top tier semiconductor supplier offering Dynamic Random Access Memory chips ("DRAM"), flash memory chips ("NAND flash") and CMOS Image Sensors ("CIS") for a wide range of distinguished customers globally. The Company's shares are traded on the Korea Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about SK hynix is available at www.skhynix.com, news.skhynix.com.

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SOURCE SK hynix Inc.

FAQ

What were SK hynix's 1Q24 revenues?

SK hynix reported 12.43 trillion won in revenues for the first quarter of 2024.

What was the operating profit for SK hynix in 1Q24?

SK hynix achieved an operating profit of 2.886 trillion won in the first quarter of 2024, showing a significant increase compared to the previous quarter.

How did the NAND business perform in 1Q24?

The NAND business of SK hynix experienced a turnaround in 1Q24 with rising eSSD sales and product prices, indicating positive growth.

What are SK hynix's plans to strengthen its position in the memory market?

SK hynix plans to focus on increasing supply volume of HBM3E in the DRAM space, launching new products like 32Gb DDR5, and optimizing its NAND business to meet market demands.

What investments is SK hynix making to expand its production capacities?

SK hynix is investing in new facilities like the M15X fab in Cheongju, North Chungcheong Province, to expand its production capacities.