SK hynix Inc. Reports Second Quarter 2022 Results

Rhea-AI Summary

SK hynix reported Q2 2022 revenues of 13.81 trillion won, marking a 14% increase quarter-over-quarter and a 34% increase year-over-year. The operating profit reached 4.19 trillion won with a 30% operating margin, showcasing strong profitability. This is the first time revenues exceeded 13 trillion won in a quarter. Despite falling DRAM prices, rising NAND prices and increased sales volume contributed to revenue growth. However, demand for memory is expected to slow in the second half due to reduced shipments of PCs and smartphones.

Positive

• Record quarterly sales with revenues over 13 trillion won.
• Operating profit of 4.19 trillion won, a 47% increase quarter-over-quarter.
• Operating margin at 30%, showing improved profitability.

Negative

• Predicted slowdown in memory demand for second half of 2022 due to lower shipments of PCs and smartphones.
• Potential decline in server memory demand as customers may prefer to use existing inventories.

SEOUL, South Korea, July 26, 2022 /PRNewswire/ -- SK hynix Inc. (or "the company", www.skhynix.com) reported today revenues of 13.81 trillion won, operating profit of 4.19 trillion won (with operating margin of 30%), and net income of 2.88 trillion (with net income margin 21%) in the second quarter of 2022.

* SK hynix reported 12.16 trillion won in revenues, 2.86 trillion won in operating profit, and net income 1.98 trillion won in the first quarter of 2022

The company achieved record high quarterly sales along with operating profits over 4 trillion won.

This is the first time that SK hynix has posted revenues over 13 trillion won in a single quarter. Previously, the company's highest quarterly revenues were 12.38 trillion won, recorded in the fourth quarter of 2021.

"Although DRAM product prices fell during the second quarter, revenues increased as NAND prices rose and overall sales volume increased," the company said. "Continued rise of the US dollar and the addition of Solidigm's sales also worked as positive factors for the quarterly revenue."

In addition, the company recovered an operating profit over 4 trillion won and an operating profit margin of 30% after two quarters following the fourth quarter of last year**. This is attributable to the improvement in profitability as the yield rate of the flagship products, the 1anm DRAM and 176-layer 4D NAND, has improved.

** Operating margin of 4.22 trillion won in the fourth quarter of 2021

"It is meaningful to have achieved excellent business performance despite the difficult business environment such as global inflation, prolonged conflicts between Russia and Ukraine, and COVID-19 lockdown in certain regions of China," the company added.

However, SK hynix predicted that memory demand would slow in the second half of the year. This is because shipments of PCs and smartphones that contain memory are expected to become lower than initially predicted. In addition, the demand for server memory supplied to data center customers is also likely to slow as customers will consume their inventories preferentially. However, the company expects that the memory demand for data centers will grow steadily in mid- to long-term.

Regarding the future business plan, SK hynix stated that it would carefully review next year's investment plan while monitoring product inventory levels in the second half of the year.

"Although the uncertainty of the business environment has increased recently, we are confident in the long-term growth potential of the memory industry," said Kevin (Jongwon) Noh, president & chief marketing officer (CMO) at SK hynix. "We will focus on increasing fundamental business competitiveness while flexibly adapting to changes in the business environment."

• 2Q22 Financial Results (K-IFRS)

				Unit: Billion KRW
	2Q22	QoQ		YoY
		1Q22	% Change	2Q21	% Change
Revenues	13,811.0	12,155.7	14 %	10,321.7	34 %
Operating Profit	4,192.6	2,859.6	47 %	2,694.6	56 %
Operating Margin	30 %	24 %	7%P	26 %	4%P
Net Income	2,876.8	1,982.9	45 %	1,988.4	45 %

• The financial information of the earnings is written based on K-IFRS.

Please note that the financial results discussed herein are preliminary and speak only as of June 30, 2022. Readers should not assume that this information remains operative at a later time. In addition, this information may include forward-looking statements that involve a variety of risks and uncertainties that could cause actual results to differ materially. For further discussion of these risks and uncertainties, readers should refer to SK hynix Inc.'s filings with the Korea Exchange. This document is neither an offer to sell nor a solicitation of an offer to sell any security of SK hynix Inc.

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.

View original content:https://www.prnewswire.com/news-releases/sk-hynix-inc-reports-second-quarter-2022-results-301593866.html

SOURCE SK hynix Inc.

FAQ

What were SK hynix's Q2 2022 financial results?

In Q2 2022, SK hynix reported revenues of 13.81 trillion won, operating profit of 4.19 trillion won, and net income of 2.88 trillion won.

What contributed to SK hynix's Q2 2022 revenue growth?

Revenue growth was driven by rising NAND prices and increased overall sales volume despite falling DRAM prices.

How does the Q2 2022 performance compare to Q1 2022 for SK hynix?

SK hynix's revenues increased by 14% compared to Q1 2022, and operating profit rose by 47%.

What challenges is SK hynix facing moving into the second half of 2022?

SK hynix anticipates a slowdown in memory demand due to lower shipments of PCs and smartphones and reduced demand from data center customers.

What is the future outlook for SK hynix according to the press release?

SK hynix remains confident in the long-term growth potential of the memory industry despite current uncertainties.