SK Hynix Reports Q1 Revenue of 12.1557 Trillion Won... Record High for Q1

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[Asia Economy Reporter Jin-ho Kim] SK Hynix recorded sales exceeding 12 trillion won in the first quarter of this year. This is the 'largest ever' scale for a first quarter.

On the 27th, SK Hynix held a business performance presentation and announced that it recorded sales of 12.1557 trillion won and operating profit of 2.8596 trillion won in the first quarter of this year. Compared to the first quarter of last year, sales increased by 43% and operating profit by 116%. Net profit also doubled from the first quarter of last year to 1.9829 trillion won.

Sales in the first quarter of this year are more than 3 trillion won higher than the first quarter of 2018 (8.8197 trillion won), which was the peak period of the semiconductor industry. Operating profit is also the highest for a first quarter since the first quarter of 2018.

This is analyzed as an effect of the smaller-than-expected decline in memory product prices and the addition of sales from Solidigm, a subsidiary incorporated at the end of last year. An SK Hynix official said, "Some IT product consumption slowed down due to difficult business conditions such as supply chain instability this year, but we achieved good results by flexibly responding to changes in customer demand and focusing on profitability management."

However, SK Hynix decided to recognize accounting costs related to quality degradation issues in some DRAM products sold in the past.

The company has completed the cause analysis and plans to proceed with compensation procedures such as product exchanges after consultations with customers. The estimated costs incurred during this process will be accounted for in the first quarter as a one-time sales warranty provision of about 380 billion won.

Although SK Hynix incurred one-time costs in the first quarter, it explained that business schedules such as technology development and next-generation product production proceeded as planned, so there will be no impact on future performance. SK Hynix stated, "We are increasing production yield and expanding the production ratio of 10-nanometer 4th generation (1a) DRAM and 176-layer 4D NAND products, and next-generation product development is progressing smoothly."

SK Hynix Business Division Head Jong-won Noh said, "Despite the first quarter being a seasonal off-season, we achieved meaningful results," and added, "As demand for server products is recently increasing, we expect the memory semiconductor market to improve as we move into the second half of the year." He continued, "Although there are some difficulties in equipment supply currently, we will continuously improve process yields to meet customer demand without disruption."

Meanwhile, SK Hynix announced on the same day that it revised the 'Outside Director Candidate Recommendation Committee Regulations' to strengthen the independence and diversity of board activities. The revision includes strengthening the verification process for outside director candidates and efforts to expand the recommendation and appointment of female outside director candidates from the perspective of environmental, social, and governance (ESG) management.

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