SK Hynix Reports 6.3 Trillion KRW Loss in First Half: "Memory Market Entering Recovery Phase" (Update)

Operating Loss of 2.8821 Trillion KRW in Q2... Third Consecutive Quarter of Deficit
Sales Halved

SK Hynix recorded an operating loss close to 3 trillion won in the second quarter of this year due to sluggish memory market conditions. This marks the third consecutive quarter of losses since the fourth quarter of last year.

On the 26th, SK Hynix announced that it posted a consolidated operating loss of 2.8821 trillion won in the second quarter of this year, turning to a deficit compared to the same period last year. During the same period, sales decreased by 47.1% year-on-year to 7.3059 trillion won, and net loss reached 2.9879 trillion won, also turning negative.

SK Hynix recorded an operating loss of 3.4023 trillion won in the first quarter. This means the total loss for the first half of the year exceeds 6 trillion won. Following an operating loss of 1.7012 trillion won in the fourth quarter of last year, marking the first quarterly loss in 10 years, the company has recorded losses for three consecutive quarters.

However, compared to the first quarter, sales increased and the scale of operating losses decreased. A company official explained, "With the expansion of the generative AI market centered around ChatGPT, demand for memory for AI servers surged. Accordingly, sales of premium products such as HBM3 and DDR5 increased, resulting in a 44% increase in second-quarter sales compared to the first quarter and a 15% decrease in operating losses."

SK Hynix analyzed that sales volumes of DRAM and NAND increased in the second quarter, and especially the average selling price (ASP) of DRAM rose compared to the first quarter, contributing to the sales increase. Although prices of general DRAM such as DDR4 continued to decline due to weak PC and smartphone markets, the increase in sales of high-priced, high-spec products used in AI servers raised the overall DRAM ASP compared to the first quarter.

SK Hynix plans to steadily increase sales centered on AI memory such as HBM3, high-performance DRAM like DDR5 and LPDDR5, and SSDs based on 176-layer NAND, aiming to accelerate performance improvement in the second half of the year.

Additionally, the company announced plans to improve the initial mass production yield and quality of the 10-nanometer 5th generation (1b) DRAM and 238-layer NAND this year, to quickly increase the proportion of mass production during the upcoming upturn. However, the company noted that the inventory reduction speed of NAND is slower than that of DRAM and decided to expand the scale of production cuts for NAND products.

Kim Woo-hyun, Vice President (CFO) of SK Hynix, stated, "While the policy to reduce overall investment by more than 50% compared to last year remains unchanged, we will continue to invest in expanding production capacity for high-capacity DDR5 and HBM3, which will lead future market growth, using resources secured through management efficiency improvements." He added, "The memory semiconductor market appears to have entered a recovery phase from the first quarter low point. Our company will strive to rapidly improve performance based on our technological competitiveness in high-performance products."

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