SK hynix Reports First Quarter 2023 Financial Results

Rhea-AI Summary

SK hynix reported its Q1 2023 financial results, registering revenues of 5.088 trillion won, an operating loss of 3.402 trillion won (67% operating margin), and a net loss of 2.586 trillion won (51% net margin). The unfavorable results were attributed to weakened demand and falling prices of memory chips, leading to a 34% decline in revenue compared to Q4 2022 and a 58% decrease year-over-year. Despite these challenges, the company anticipates revenue growth in Q2 as market conditions improve and sales volume increases. SK hynix aims to enhance its position in the premium memory market with products like DDR5, LPDDR5, and HBM3, and will maintain investment in high-performance memory technology while preparing for the production of cutting-edge 1b nanometer DRAM and 238-layer NAND.

Positive

• Anticipation of revenue growth in Q2 2023 as market conditions improve.
• Focus on high-performance memory products, including DDR5 and HBM3, expected to drive future sales.

Negative

• Operating loss widened significantly to 3.402 trillion won, representing a 79% increase compared to the previous quarter.
• Revenue decreased by 34% quarter-over-quarter and 58% year-over-year.

• Revenues at 5.088 trillion won, operating loss at 3.402 trillion won, net loss at 2.586 trillion won
• Operating loss continues due to weak demand and price fall of memory chips; Revenues expected to improve in Q2
• "Company to lead premium memory market with flagship products including DDR5, LPDDR5, HBM3"

SEOUL, South Korea, April 25, 2023 /PRNewswire/ -- SK hynix Inc. (or "the company", www.skhynix.com) today reported financial results for the first quarter ended March 31, 2023. The company recorded revenues of 5.088 trillion won, operating loss of 3.402 trillion won (with operating margin of negative 67%), and net loss of 2.586 trillion won (with net profit margin of negative 51%) in the first quarter 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."

The company 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.

The company also expects the growing high-performance server market for artificial intelligence including ChatGPT and a wider adoption of high-capacity memory products by customers to have positive impact on the market.

SK hynix, accordingly, 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.

Moreover, the company 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.

"The memory market, which is still under tough conditions, seems to be bottoming out," Kim said. "We will make all efforts to restore the corporate value by focusing on improving profitability and technology development as we believe that the market will soon find a balance."

• 1Q23 Financial Results (K-IFRS)

				Unit: Billion KRW
	2023 1Q	2022 4Q	QoQ	2022 1Q	YoY
Revenue	5,088	7,672	-34 %	12,156	-58 %
Operating Profit	-3,402	-1,898	-79 %	2,864	(turn to loss)
Operating Profit Margin	-67 %	-25 %	-42%p	24 %	-91%p
Net Income	-2,586	-3,721	31 %	1,987	(turn to loss)
※ Financial information of the earnings is based on K-IFRS
※ Please note that the financial results discussed herein are preliminary and speak only as of March 31, 2023. Readers should not assume that this information remains operative at a later time.

 

"These materials are not an offer for sale of the securities of SK hynix Inc. in the United States. The securities may not be offered or sold in the United States absent registration with the U.S. Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. SK hynix Inc. does not intend to register any offering in the United States or to conduct a public offering of securities in the United States."

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 financial results for Q1 2023?

SK hynix reported revenues of 5.088 trillion won, an operating loss of 3.402 trillion won, and a net loss of 2.586 trillion won.

What caused the losses reported by SK hynix?

The losses were primarily due to weak demand and declining prices of memory chips.

What does SK hynix expect for future revenues?

SK hynix expects revenue improvement in Q2 2023 as market conditions are forecasted to recover.

Which products is SK hynix focusing on to improve its market position?

SK hynix is focusing on high-performance DRAM products such as DDR5, LPDDR5, and HBM3.

What are the major growth areas SK hynix is targeting?

The company is targeting the growing high-performance server market, including AI applications.