[News] Strong Performance in HBM Ends SK Hynix’s Four Consecutive Quarters of Losses

2024-01-25 Semiconductors editor

South Korean memory giant SK Hynix has released its financial results for the fourth quarter of 2023 and the full year 2023, ending on December 31, 2023. In the fourth quarter, the revenue reached KRW 11.306 trillion, operating profit amounted to KRW 346 billion, and net loss was KRW 1.38 trillion. The operating profit margin for Q4 2023 was 3%, with a net profit margin of negative 12%.

Source: SK Hynix

SK Hynix noted that, with the rebound in the memory market, the operating profit for the fourth quarter of 2023 reached KRW 346 billion, successfully marking a turnaround from losses. This signifies that SK Hynix, in just one year, has managed to break free from the continuous operating losses experienced since the fourth quarter of 2022.

SK Hynix emphasizes that the overall memory market conditions improved in the last quarter of 2023 with demand for AI server and mobile applications increasing and average selling price (ASP) rising. 

Simultaneously, the effective implementation of a profit-oriented business plan by SK Hynix has enabled the company to achieve the goal of turning losses into profits within just one year.

Source: SK Hynix

Furthermore, SK Hynix has reduced the cumulative scale of operating losses that persisted until Q3 2023. In total, the consolidated revenue for 2023 reached KRW 32.766 trillion, with an operating loss of KRW 7.73 trillion and a net loss of KRW 9.138 trillion. Overall, the operating loss rate for 2023 is 24%, and the net loss rate is 27%.

SK Hynix also notes that in the DRAM sector for 2023, the company actively addressed customer demands. The revenue for the company’s flagship products, DDR5 and HBM3, increased by more than four and five times, respectively, compared to 2022.

Additionally, considering the relatively slow recovery in the NAND Flash memory market, the business plan primarily focuses on investment and cost efficiency.

In response to the growing trend in demand for high-performance DRAM, SK Hynix will smoothly proceed with the mass production of HBM3e memory for AI and the development of HBM4.

TrendForce’s earlier research into the HBM market indicates that NVIDIA plans to diversify its HBM suppliers for more robust and efficient supply chain management. The progress of HBM3e, as outlined in the timeline below, shows that SK Hynix provided its 8hi (24GB) samples to NVIDIA  in mid-August.

Simultaneously, the company aims to supply high-performance and high-capacity products like DDR5 and LPDDR5T to the server and mobile markets.

Moreover, to address the continued growth in demand for AI servers and the widespread adoption of edge AI computing applications, SK Hynix will exert efforts in the development of high-capacity server module MCR DIMM and mobile module LPCAMM2 to respond to the ever-increasing demand for AI servers and on-device AI adoption.

For NAND, the company aims to continue to improve profitability and stabilize the business by expanding sales of premium products such as eSSD, expected to improve profitability and strengthen internal management.

Lastly, SK Hynix emphasizes its commitment to maintaining and enhancing profitability and efficiency by continuing to expand the production of high-value-added products in 2024, similar to its strategy in 2023. The company will focus on minimizing capital expenditures while prioritizing stable business operations. 

“We achieved a remarkable turnaround, marking the first operating profit in the fourth quarter following a protracted downturn, thanks to our technological leadership in the AI memory space,” said Kim Woohyun, Vice President and Chief Financial Officer (CFO) at SK Hynix.

Kim further stated, “We are now ready to grow into a total AI memory provider by leading changes and presenting customized solutions as we enter an era for a new leap forward.”

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(Photo credit: SK Hynix)

Please note that this article cites information from SK Hynix