SK hynix: Fiscal 4Q23 Financial Results

• Reports first quarterly profit in a year, backed by demand recovery, industry rebound
• Revenue for 2023 at 32.77 trillion won, operating loss at 7.73 trillion won
• Aims to grow into ‘total AI memory provider’ of optimal memory solutions

SK hynix Inc. recorded an operating profit of 346 billion won in 4FQ23 amid a recovery of the memory chip market, marking the first quarter of profit following 4 straight quarters of losses.

The company posted revenues of 11.31 trillion won, operating profit of 346 billion won (operating profit margin at 3%), and net loss of 1.38 trillion won (net profit margin at negative 12%) for the 3 months ended December 31, 2023. (Based on K-IFRS)

It said that the overall memory market conditions improved in 4FQ23 with demand for AI server and mobile applications increasing and ASP rising.

“We recorded the first quarterly profit in a year following efforts to focus on profitability,” it said.

The financial results of the last quarter helped narrow the operating loss for the entire year to 7.73 trillion won (operating profit margin at negative 24%) and net loss to 9.14 trillion won (with net profit margin at negative 28%). The revenue was 32.77 trillion won.

The company said that sales of its main products, DDR5 and HBM3, increased by more than 4x and 5x, respectively, compared with a year earlier, as it took advantage of its market-leading technology in the DRAM space to actively respond to customer demand. In the NAND space, where a recovery is relatively slow, it prioritized streamlining investments and costs.

It will now proceed with mass production of HBM3E, a main AI memory product, and ongoing development of HBM4 smoothly, while supplying high-performance, high-capacity products such as DDR5 and LPDDR5T to server and mobile markets in a timely manner, to meet increasing demand for high-performance DRAM.

It also plans to make its technological leadership stronger by preparing high-capacity server module MCRDIMM1 and mobile module LPCAMM22 to respond to ever-increasing demand for AI server and on-device AI adoption.

• 1MCR DIMM (Multiplexer Combined Ranks Dual In-line Memory Module): A module product with multiple DRAMs bonded to a motherboard, in which 2 ranks, basic information processing units, operate simultaneously, resulting in improved speed
• 2LPCAMM2 (Low Power Compression Attached Memory Module 2): LPDDR5X-based module solution that provides power efficiency and high performance as well as space savings. It has the performance effect of replacing two existing DDR5 SODIMMs with one LPCAMM2

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

For FY24, it will focus on improving profitability and efficiency through sales of value-added products, while minimizing an increase in capital expenditure for a stable operation of the business.

“We achieved a remarkable turnaround, marking the first operating profit in 4FQ23 following a protracted downturn, thanks to our technological leadership in the AI memory space,” said Kim Woohyun, VP and CFO. “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.“