SK Hynix Encourages Employee Vacations... Industry Develops Survival Strategies Amid Semiconductor Slump

SK Hynix Promotes Annual Leave Usage to Cut Costs
Samsung Electronics' Kyung Kyehyun: "Active Downturn Measures Implemented"
Challenging First Half... Inventory Reduction Expected in Second Half Increased

Samsung Electronics and SK Hynix are devising survival strategies to endure the worst semiconductor downturn in history. While adjusting memory supply by cutting production, they are also focusing on improving management efficiency by reducing various investments and promoting the use of annual leave.

On the 4th, SK Hynix announced the results of its 'In-house Idea Contest for Overcoming the Crisis' held last month, deciding to encourage the use of annual leave and long vacations. The announcement was made at a company-wide communication event hosted by SK Hynix President Kwak No-jung at the headquarters in Icheon, Gyeonggi Province the day before.

To activate the use of annual leave, the company plans to introduce a vacation usage reward program. Employees who use more than 80% of their accrued annual leave will receive benefits including welfare points. To encourage long vacations of two weeks or more (Big Break), executives and team leaders will lead by example.

Kwak No-jeong, President of SK Hynix, is speaking at a company-wide communication event held at the headquarters in Icheon, Gyeonggi Province on the 3rd. / Photo by SK Hynix Newsroom

SK Hynix has taken these steps as part of cost-cutting measures. The global economic downturn has reduced IT demand and caused semiconductor prices to plummet, shrinking earnings. The company has already tightened its belt by cutting business activity expenses for executives and team leaders by more than 30% compared to last year.

Samsung Electronics is also actively responding as its performance falters due to the sluggish market. A representative example is last month’s official announcement to reduce wafer input volume. Kyung Kye-hyun, President of Samsung Electronics’ DS Division, warned at an internal event last month, "We will implement active downturn measures to respond to the rapid deterioration of performance." This is Samsung’s way of cost-cutting, squeezing water from a dry towel.

The market expects Samsung Electronics and SK Hynix to face a tough first half of the year. The Semiconductor Equipment and Materials International (SEMI) reported that global silicon wafer shipments in the first quarter fell 11.3% year-on-year to 3.254 billion square inches. It also analyzed that the decline in memory demand had an impact.

From the second half of the year, the effect of production cuts may reduce the inventory piled up in the market, signaling an improvement in the industry. Kim Kwang-jin, a researcher at Hanwha Investment & Securities, predicted, "Inventory levels are expected to peak in the second quarter and then begin to decrease significantly from the third quarter."

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