SK hynix Announces 1Q24 Financial Results

Revenues at 12.43 trillion won, operating profit at 2.886 trillion won, net profit at 1.917 trillion won1Q revenues all-time high, operating profit 2nd highest for 1Q resultNAND turns around on rise in eSSD sales, product pricesTo continue to work towards improving earnings with leadership in AI memory

SEOUL, South Korea, April 24, 2024 /PRNewswire/ — SK hynix Inc. (or “the company”, www.skhynix.com) announced today that it recorded 12.43 trillion won in revenues, 2.886 trillion won in operating profit (with an operating margin of 23%), and 1.917 trillion won in net profit (with a net margin of 15%) in the first quarter.

With revenues marking an all-time high for a first quarter and the operating profit a second-highest following the records of the first quarter of 2018, SK hynix believes that it has entered the phase of a clear rebound following a prolonged downturn.

The company said that an increase in the sales of AI server products backed by its leadership in AI memory technology including HBM and continued efforts to prioritize profitability led to a 734% on-quarter jump in the operating profit. With the sales ratio of eSSD, a premium product, on the rise and the average selling prices rising, the NAND business has also achieved a meaningful turnaround in the same period.

SK hynix forecasts the overall memory market to be on a steady growth path in coming months as demand for AI memory continues to rise, while the market for the conventional DRAM also starts to recover from the second half. Industry experts believe that inventories both at suppliers and customers will decrease as an increase in production of premium products such as HBM requires higher production capacities than conventional DRAM, resulting in a relative reduction in conventional DRAM supply.

In the DRAM space, the company plans to increase supply volume of HBM3E, of which mass production has started in March for the first time in the industry, while expanding the customer base. The company will also introduce 32Gb DDR5 products based on the 1bnm process, the fifth generation of the 10nm technology, within this year to strengthen its leadership in the high-capacity server DRAM market.

For the NAND business, SK hynix will seek product optimization to sustain the trend of earnings recovery. SK hynix will aggressively increase the sales of both high-performance 16-channel eSSD, an area where the company has a technological edge, and QLC-based high-capacity eSSD by its U.S. subsidiary Solidigm. It will also launch the fifth generation of the PCIe cSSD for AI PCs at an early time in order to respond to market demands with an optimized product lineup.

Separately, SK hynix announced a day earlier that it will accelerate the process to build the M15X fab in Cheongju, North Chungcheong Province, to expand DRAM production capacities.

Aside from the M15X fab, the company will also carry out investments in advanced packaging facilities in Indiana and the Yongin Semiconductor Cluster as planned over the longer term.

With sizeable investments planned, the overall capital expenditure for this year is expected to be larger than initially planned at the beginning of 2024. In addition to the plan to increase investment to meet rising customer demand, SK hynix will also boost supply of conventional DRAM in line with market trend, which it expects to lead to a steady growth of the global memory market and an improved investment efficiency and financial soundness of the company.

“With the industry’s best technology in the AI memory space led by HBM, we have entered a clear recovery phase,” Chief Financial Officer Kim Woohyun said. “We will continue to work towards improving our financial results by providing the industry’s best performing products at a right time and maintaining the profitability-first commitment.”

1Q24 Financial Results (K-IFRS)

About SK hynix Inc.

SK hynix Inc., headquartered in Korea, is the world’s top tier semiconductor supplier offering Dynamic Random Access Memory chips (“DRAM”), flash memory chips (“NAND flash”) and CMOS Image Sensors (“CIS”) for a wide range of distinguished customers globally. The Company’s shares are traded on the Korea Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about SK hynix is available at www.skhynix.com, news.skhynix.com.

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SOURCE SK hynix Inc.