SK hynix achieves record 12.15 trillion won in Q1 sales

The Korea Times

The Korea Times

Business

Fri, September 29, 2023 | 09:52

Tech

SK hynix achieves record 12.15 trillion won in Q1 sales

Posted : 2022-04-27 16:51

Updated : 2022-04-27 16:52

SK hynix's M16 factory in Icheon, Gyeonggi Province / Courtesy of SK hynix

By Baek Byung-yeul

Park Jung-ho, the vice chairman and co-CEO of SK hynix

SK hynix saw first quarter sales rise to an all-time high as memory chip prices remained stable despite sluggish global market conditions, while its newly incorporated subsidiary performed better than expected, Korea's second-largest memory chipmaker said Wednesday.

The company announced its January-March earnings with sales coming in at 12.15 trillion won ($9.62 billion), up 43 percent from the same period of 2021. Operating profit reached 2.85 trillion won, up 116 percent year-on-year.

This year is the first time that sales exceeded 12 trillion won in the first quarter, which is traditionally a slow season for chipmakers, the company said.

It added that sales and profitability improved significantly by adding Solidigm, which was incorporated as a subsidiary at the end of 2021. SK hynix launched the U.S. subsidiary, which specializes in the solid-state drive business, last December, after completing the first phase of acquiring Intel's NAND flash memory division.

"Consumption of some IT products slowed down from the start of the year amid ongoing challenges including the supply chain issue," the company said. "SK hynix responded to customer demand in a flexible way, while focusing on profitability management, resulting in handsome earnings."

/The company said its first quarter earnings also reflected a one-off provision that the company decided to set aside, following the discovery of a weakness in the performance of some DRAM products sold previously.

"Following a thorough analysis of the reason and close consultation with the customer, SK hynix decided to start a compensation process including product exchange for the customer. The provision amount of 380 billion won is believed to be enough to cover the costs of the compensation," the company said.

SK hynix expects memory chip prices to recover from the second quarter of this year and for shipments of its memory chips to increase.

"Demand growth in the DRAM market is expected to be in the high 10-percent range this year," Noh Jong-won, the chief marketing officer of the company, told investors during a conference call. "Shipments by SK hynix are also expected to grow at a similar level."

SK hynix expects to continue facing uncertainties this year caused by the war between Russia and Ukraine and lockdowns of Chinese cities, but the executive stressed that the company will overcome these obstacles with memory chips for servers.

"Although demand for PCs and smartphones has slowed down, strong server-oriented demand will offset this," Noh said.

baekby@koreatimes.co.kr