Quarterly figures: SK Hynix in the downward spiral of the memory market


SK Hynix had warned early on that the new figures underpin their fears of deep red figures at the end of 2022. In addition to a 38 percent drop in sales, operating profit also collapsed for the first time in over ten years so far that a minus was written.

Deep in the red

The drop in sales is made very clear by the chart provided by SK Hynix in the quarterly report. Of what used to be just under 12.4 trillion South Korean won, 7.7 trillion won were left within a year, or around 6.3 billion US dollars. The group is now no longer profitable, with profits of 3.3 trillion won in the same quarter last year having turned into a loss of 3.5 trillion won, almost 2.9 billion US dollars.

Sales development and share of production (Image: SK Hynix)
SK Hynix slips into the red in the fourth quarter (Image: SK Hynix)

Like all major memory manufacturers, it is the DRAM business that is of greatest concern. Not only has demand collapsed due to the weakness in the PC market, but prices have also collapsed. Samsung had already reported price declines for DRAM averaging more than 30 percent this week, the statements from SK Hynix point in a similar direction.

SK Hynix has not yet bottomed out either. The first quarter of 2023 is forecast to be a new low in recent history. SK Hynix expects that both DRAM and NAND will be even less in demand. SK Hynix is ​​sticking to the cutback plans, most of which were already in place in the fall. Expenditure should be reduced by more than 50 percent, fewer wafer starts, especially in the DRAM area, will curb losses.

The future plan of SK Hynix (Image: SK Hynix)
Spending cuts of over 50 percent (Image: SK Hynix)

Hope dies last

SK Hynix relies heavily on the forecasts and hopes shared by others Manufacturers cling: In the second half of the year things should go uphill again. But until then, perseverance is the order of the day, even a poor first quarter could be followed by a somewhat rosy second quarter. Nobody knows when the market will bottom.

We expect to see a quick turnaround when the market bottoms out.

SK Hynix