SK Hynix Turns Profitable in Q4 FY2023 on the Back of Strong DDR5 and HBM Results

Creation Date

SK Hynix today announced its financial results for the fiscal year 2023 and the fourth quarter ended 31 December 2023, 25 January 2024. The company's combined revenue for the fourth quarter of FY2023 was KRW11.3055 trillion, operating profit was KRW0.3460 trillion, and net loss was KRW1.3795 trillion.The operating profit margin for the fourth quarter of FY2023 was 3%, and the net loss margin was 12%.

 

With the rebound in the semiconductor memory market, the company managed to turn a profit in the fourth quarter of last year with an operating profit of KRW 0.3460 trillion. With this, the company has escaped from the operating loss that has been sustained since the fourth quarter of 2022 after only one year.

SK Hynix explained:

The memory market environment improved in the fourth quarter of last year, including increased demand for products used in AI servers and mobile devices, and a rise in the average selling price (ASP, Price). At the same time, the company continued to implement profit-oriented management activities took effect and achieved a quarterly turnaround after only one year.

As a result, the company reduced its accumulated operating loss, which had been sustained up to the third quarter of last year, to KRW 32.7657 trillion on consolidated revenue, KRW 7.7303 trillion on operating loss, and KRW 9.1375 trillion on net loss for FY2023, with an operating loss ratio of 24% and a net loss ratio of 28%.

 

SK Hynix said:

Last year in DRAM, the company actively responded to customer demand with the technical strength of traction in the market, as a result of which the company's main products DDR5 DRAM and HBM3 revenue increased by more than 4 times and 5 times year-on-year, respectively. In addition, for NAND flash memory, where market conditions have been relatively slow to recover, the main focus has been on the efficiency of investment and expenses.

In response to the growing trend of demand for high-performance DRAM, SK Hynix will smoothly proceed with the mass production of HBM3E, a memory for AI, and the development of HBM4, while supplying high-performance and high-capacity products such as DDR5 DRAM and LPDDR5T DRAM to the server and mobile markets in a timely manner. Moreover, the Company will make every effort to prepare high-capacity server modules MCRDIMM* and mobile modules LPCAMM2** in response to the continuously growing demand for AI servers and the popularity of end-side AI applications, thereby continuing to maintain its technological leadership.

As for NAND flash memory, the company has decided to expand sales by focusing on high-end products such as eSSD, improve profitability and strengthen internal management.

In addition, SK Hynix emphasised:

This year, like last year, SK Hynix will focus on stable business operations by expanding production mainly of high value-added products, maintaining the policy of improving profitability and efficiency, and at the same time minimising capital expenditure (CAPEX).

SK Hynix Vice President for Finance (CFO) Yohyun Kim said:

Despite the prolonged market downturn, the company consolidated its leading position in technology fields such as memory for AI and achieved a turnaround in the fourth quarter of last year, and its performance has started to rebound across the board. Faced with a new leap forward, the company will lead the change and provide customised solutions to grow into an 'integrated AI memory provider'.

Multiplexer Combined Ranks Dual In-line Memory Module: A module product that combines multiple DRAMs on a single substrate. The module's two basic information processing units, Rank, are operated at the same time, thereby increasing speed.

(Low Power Compression Attached Memory Module 2): A module solution based on LPDDR5X that offers the performance effect of replacing two existing DDR5 SODIMMs with a single LPCAMM2, saving space while achieving low power consumption and high performance.

Please note: The information in this document relating to the financial results is preliminary information for the year ending 31 December 2023 only. Readers should not assume that this information will continue to be valid at a later date. In addition, this information may include forward-looking statements that involve various risks and uncertainties and could cause actual results to differ materially. For further discussion of these risks and uncertainties, readers should refer to SK Hynix's filings with the Korea Exchange. This document is neither an offer to sell nor a solicitation of an offer to sell SK Hynix securities.