[Concall] Lee Seok-hee, SK Hynix CEO: "NAND Sales to Grow Over 3 Times Within 5 Years" (Summary)

SK Hynix Q3 Earnings Conference Call
Paid $7 Billion Cash of $9 Billion Intel NAND Acquisition, External Financing If Needed
"EUV Introduction for Advanced Process Proceeding as Scheduled"
"Turning Point to Achieve 100 Trillion KRW Corporate Value... Creating Economic and Social Value"

[Asia Economy Reporter Ki-min Lee] Lee Seok-hee, CEO of SK Hynix, expressed his ambition on the 4th regarding the acquisition of Intel's NAND flash business worth 10.3 trillion won (9 billion dollars), stating, "We will achieve more than triple growth in NAND flash sales within five years."

During the SK Hynix Q3 earnings conference call held that morning, CEO Lee explained the details and future plans related to the acquisition of Intel's NAND business.

He emphasized that due to the Fourth Industrial Revolution driven by the Internet of Things (IoT), Artificial Intelligence (AI), and other technologies, data is continuously increasing, marking a new turning point for the NAND industry. To secure core technologies and a product portfolio for future NAND market growth, SK Hynix decided to acquire Intel's NAND business segment. CEO Lee forecasted, "The NAND market size will reach 5.7 times the current level by 2030, amounting to 5.1 billion TB, and the proportion of SSDs, which have significantly superior speed and power consumption, will expand to the mid-40% range."

Regarding plans after acquiring Intel's NAND division, CEO Lee stated, "Within the next three years, we will secure self-sustaining business capabilities in NAND, and within five years, we will grow Hynix's NAND sales to more than three times the pre-acquisition level." He added, "Through the acquisition of Intel NAND, we aim to be recognized not only as a leading DRAM company but also as a top memory player." According to market research firm Omdia, SK Hynix's NAND sales last year were approximately $4.552 billion (about 5.2 trillion won), ranking fourth in the industry.

He continued, "With the first closing in 2021, we secured Intel's solid-state drive (SSD) intellectual property (IP), technology, and product sales capabilities, which is expected to immediately increase NAND sales and profitability." He also projected, "Until the final acquisition is completed in March 2025, Intel will be responsible for operating the Dalian fab and technology development. Even after the current transition to 144-layer technology, it will be possible to transition to the 2nd and 3rd generation processes or beyond."

Regarding the financing of the Intel NAND acquisition, he said, "The $7 billion (about 7.975 trillion won) to be paid at the first closing by the end of next year will be paid in cash." He added, "About half will be covered by cash and cash equivalents on hand and future operating cash flow, and the remainder will be financed through borrowing or other external sources, with asset securitization options also being considered if necessary."

On the introduction of extreme ultraviolet (EUV) equipment for fine process execution, CEO Lee stated, "We have prepared an EUV-dedicated cleanroom space at the Icheon M16 plant, which will be completed by the end of this year, and the equipment is scheduled to be delivered on time." He added, "We plan to apply EUV starting from the 10nm 4th generation (1a) production, and development is progressing well as planned."

Concluding the conference call, CEO Lee said, "This is a new turning point to accelerate the achievement of our corporate value goal of 100 trillion won." He emphasized, "The synergy created through this (Intel NAND business) acquisition will provide not only economic value but also social value to all stakeholders, including our company, customers, partners, the global ICT industry, shareholders, local communities, and employees."

SK Hynix plans to create social value through environmental, social, and governance (ESG) management as well as economic value creation. CEO Lee stated, "Due to the COVID-19 pandemic this year, 'sustainability' has become a global issue, and among its core issues, 'climate change' has emerged as a problem affecting human survival." He added, "Accordingly, SK Hynix has applied to join 'RE100,' committing to sourcing 100% of the electricity we consume from renewable energy by 2050."

He further explained that to reduce power consumption and carbon dioxide emissions, SK Hynix will accelerate the transition to SSDs in the data storage market. Typically, general SSDs consume 50% less power than hard disk drives (HDDs), and low-power SSDs consume 94% less. CEO Lee said, "If by 2030, all HDD-based storage capacity in global data centers is replaced by low-power SSDs, the reduction in carbon dioxide emissions is estimated at 41 million tons, which is expected to create social value worth more than 4.2 trillion won."

This content was produced with the assistance of AI translation services.