SK Hynix to Pay 100% Bonus for Achieving Profit in Second Half of the Year

Despite 4Q Deficit Outlook, Achieving Profit in the Second Half

[Asia Economy Reporter Kim Pyeonghwa] SK Hynix has decided to pay the second half productivity incentive (PI) at 100% of the base salary, conditional on achieving operating profit in the second half of last year.

On the morning of the 12th, SK Hynix announced internally that the second half PI for last year would be paid the next day under these conditions. PI is an incentive paid twice a year, in the first and second halves, based on achieving productivity targets. It can be paid up to 100% of the monthly base salary.

Previously, SK Hynix had indicated that PI would be paid if operating profit was positive in the second half of last year. The market interprets this PI payment as evidence that SK Hynix recorded operating profit in the second half of last year.

Partial view of SK Hynix Cheongju Campus / Photo by SK Hynix

SK Hynix’s operating profit in the third quarter of last year was 1.6556 trillion KRW. If, as securities firms forecast, an operating loss occurred in the fourth quarter, it is speculated that the deficit would be smaller than the third quarter’s profit. According to FnGuide’s aggregation, as of this date, SK Hynix’s operating loss consensus (average forecast by securities firms) is 951.9 billion KRW.

Meanwhile, despite the continued downturn in the semiconductor industry this year following last year, SK Hynix intends to overcome difficulties through high value-added businesses. SK Hynix announced that it has received certification for the latest server DDR5 DRAM to be used in Intel’s newly released server central processing unit (CPU), 'Sapphire Rapids.'

Sapphire Rapids is a server CPU released by Intel on the 10th (local time). It is the first Intel server CPU model to support the latest DRAM standard, DDR5. The memory industry expects that data center customers will replace existing servers to apply Sapphire Rapids, which will also generate demand for server DDR5 DRAM. DDR5 has 30% higher profitability compared to the previous DDR4.

Ryu Seong-su, Vice President and Head of DRAM Product Planning at SK Hynix, said, “We are working closely with multiple customers to supply DDR5 in line with the launch of Intel’s Sapphire Rapids,” adding, “We will continue to strengthen our leadership in the server memory market, which is expected to maintain growth going forward.”

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