SK hynix: Fiscal 2Q20 Financial Results

SK hynix Inc. announced financial results for its second quarter 2020 ended on June 30, 2020.

The consolidated revenue of 2FQ20 was 8.607 trillion won while the operating profit amounted to KRW1.947 trillion, and the net income KRW1.264 trillion. Operating margin for the quarter was 23% and net margin was 15%.

Despite uncertainties of business environment due to Covid-19, both the revenue and operating income increased by 20% and 143% Q/Q respectively, as the surging demand for server memory maintained favorable memory price while numerous factors including the increase of the main products’ yield rate led to cost reduction.

For DRAM, although weak demand of mobile customers continued, thefirm expands sales of both server and graphics products as demand and price of these markets remained stable.

Consequently, both DRAM bit shipment and ASP increased by 2% and 15% Q/Q respectively.

For NAND Flash, the firm responded to the demand for SSD products. With the favorable price flow of the market, its SSD business accounted for nearly 50% of its NAND flash business for the first time. As a result, the NAND flash bit shipment and ASPe increased by 5% and 8% Q/Q respectively.

Regarding business environment in 2H20, the company sees uncertainties due to Covid-19 and the global trade dispute. However, it anticipates 5G smartphones and next-gen gaming consoles which are scheduled for launching will stimulate component demand growth, as the economic activities of major countries partially reopen.

Accordingly, SK hynix will focus on profitability-oriented product management based on the competitiveness of its product quality, while maintaining the conservative plan for capital expenditure and capacity operation as suggested in the previous quarter.

For DRAM, it will expand 1Ynm mobile DRAM sales in order to improve profitability, and timely supply LPDDR5 DRAM products to the market which has begun the full-fledged adoption of this product. At the same time, it will focus on expanding the sales of high-capacity server products larger than 64GB, and proceed with the full-scale mass-production of 1Znm DRAM products.

For NAND flash, it will not only respond to both mobile and gaming console demand, but also diversify the customer portfolio to enhance server products business competitiveness. Specifically, it will expand the customer qualification of 128-layer NAND flash products in order to ensure continuous improvement of profitability.

Jin-Seok Cha, CFO, stated: “SK hynix will flexibly cope with changes in the external business environment, and prepare the foundation for sustainable growth in 2H20.”