SK Hynix Inc. (or "the company", www.skhynix.com) announced today that it recorded an operating profit of KRW346 billion in the fourth quarter of last year amid a recovery of the memory chip market, marking the first quarter of profit following four straight quarters of losses.
The company posted revenues of KRW11.31 trillion, operating profit of KRW346 billion (operating profit margin at 3%), and net loss of KRW1.38 trillion (net profit margin at negative 12%) for the three months ended December 31, 2023. (Based on K-IFRS)
SK Hynix said that the overall memory market conditions improved in the last quarter of 2023 with demand for AI server and mobile applications increasing and average selling price (ASP) rising. "We recorded the first quarterly profit in a year following efforts to focus on profitability," it said.
The financial results of the last quarter helped narrow the operating loss for the entire year to KRW7.73 trillion (operating profit margin at negative 24%) and net loss to KRW9.14 trillion (with net profit margin at negative 28%). The revenues were KRW32.77 trillion.
SK Hynix said that sales of its main products, DDR5 and HBM3, increased by more than four and five times, respectively, compared with a year earlier, as the company took advantage of its market-leading technology in the DRAM space to actively respond to customer demand. In the NAND space, where recovery is relatively slow, the company prioritized streamlining investments and costs.
SK Hynix will now proceed with mass production of HBM3E, a main AI memory product, and ongoing development of HBM4 smoothly while supplying high-performance, high-capacity products such as DDR5 and LPDDR5T to server and mobile markets in a timely manner, to meet increasing demand for high-performance DRAM.
The company also plans to make its technological leadership stronger by preparing high-capacity server module MCRDIMM* and mobile module LPCAMM2** to respond to the ever-increasing demand for AI servers and on-device AI adoption.
*MCR DIMM (Multiplexer Combined Ranks Dual In-line Memory Module): A module product with multiple DRAMs bonded to a motherboard, in which two ranks, basic information processing units, operate simultaneously, resulting in improved speed.
**LPCAMM2(Low Power Compression Attached Memory Module 2): LPDDR5X-based module solution that provides power efficiency and high performance as well as space savings. It has the performance effect of replacing two existing DDR5 SODIMMs with one LPCAMM2.
For NAND, the company aims to continue to improve profitability and stabilize the business by expanding sales of premium products such as eSSD.
For the year 2024, SK Hynix will focus on improving profitability and efficiency through sales of value-added products, while minimizing an increase in capital expenditure for a stable operation of the business.
"We achieved a remarkable turnaround, marking the first operating profit in the fourth quarter following a protracted downturn, thanks to our technological leadership in the AI memory space," said Kim Woohyun, Vice President and Chief Financial Officer (CFO) at SK Hynix. "We are now ready to grow into a total AI memory provider by leading changes and presenting customized solutions as we enter an era for a new leap forward."
Unit: Billion KRW
SK Hynix Financial Results (K-IFRS), FY2023 (KRWb) | |||
2023 | 2022 | YoY | |
Revenues | 32,766 | 44,622 | -27% |
Operating Profit | -7,730 | 6,809 | (turn to loss) |
Operating Profit Margin | -24% | 15% | -39%p |
Net Income | -9,138 | 2,242 | (turn to loss) |
Source: Company, January 2024
SK Hynix Financial Results (K-IFRS), FY2023 4Q (KRWb) | |||||
2023 4Q | 2023 3Q | QoQ | 2022 4Q | YoY | |
Revenues | 11,306 | 9,066 | 25% | 7,672 | 47% |
Operating Profit | 346 | -1,792 | (turn to profit) | -1,912 | (turn to profit) |
Operating Profit Margin | 3% | -20% | 23%p | -25% | 28%p |
Net Income | -1,380 | -2,185 | 37% | -3,735 | 63% |
Source: Company, January 2024