May 22, 2024

SK Hynix posts first loss in 10 years from memory chip price drop

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South Korean memory chipmaker SK Hynix recorded its very first working loss in 10 several years throughout the fourth quarter very last 12 months from sluggish need and the steep drop in the price tag of memory chips.

The company mentioned on Wednesday that it recorded 7.7 trillion won in earnings and an working decline of 1.7 trillion received in the course of the quarter. Web loss also stood at a steep 3.5 trillion won. It is SK Hynix’s first quarterly working decline because the 3rd quarter of 2012.

Following savoring file need prior to and all through the pandemic, memory chipmakers are experience the brunt of the global economic downturn and the war in Ukraine.

The chip organization of Samsung, the world’s most significant memory chipmaker, scarcely broke even through the fourth quarter while US memory chip large Micron also posted a decline all through its most current fiscal quarter.

For the full year of 2022, SK Hynix recorded 44.6 trillion received in revenue and 7 trillion won in functioning revenue. Though revenue greater by 4% from 2021, functioning gain dipped by 44% year-on-year.

SK Hynix reported its operating income reduced as the memory chip business entered into a downturn setting up in the next 50 % of 2022. Uncertainties are nevertheless lingering, the business reported, and it will proceed to minimize investments and fees in response.

Like Samsung, SK Hynix expects the market ailments around the memory chip field to make improvements to in the latter component of 2023.

Even so, SK Hynix said Intel’s start this 12 months of a new server CPU that adopts DDR5 is predicted to maximize demand from customers for superior-conclude AI-dependent memory chips.

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Source link SK Hynix, a major international player in the semiconductor industry, reported its first annual loss in 10 years on January 14th as a result of a prolonged price drop in the DRAM and NAND memory chips market.

The South Korean technology giant announced that its consolidated operating profit dropped to an all-time low this past year, reaching -181.2 billion KRW (equivalent to -466 million USD) due to the absence of the government’s chip funding program, combined with the continuing price recession caused by the unprecedented global pandemic.

The lagging market has had an especially dramatic impact on SK Hynix, mainly due to the steep reduction in demand for personal computing devices and mobile phones.

Although the industry experienced a brief growth in demand during this past year, the South Korean firm was unable to gain enough traction to remain profitable as the nosedive in price continued. This is mainly attributed to a struggle in maintaining its relationships with its customers, as it was unable to satisfy the market’s demand for higher NAND flash memory products.

Looking back to the industry-wide macrodata, the industry analyst DRAMeXchange reported a thirteen percent decrease in monthly NAND Flash contract prices from January and December, 2020. This facilitated a fourteen percent decrease in the number of wafers SK Hynix shipped during Q4, 2020, compared to Q4, 2019.

This set of unfortunate events reflects on the current state of the global semiconductor market, as many other firms have faced similar losses due to the unprecedented pandemic. American firms such as Micron and Western Digital have taken great losses over the past year due to the drop in prices.

As the semiconductor industry looks towards recovery through 2021, SK Hynix is hoping to come back from this large loss with high hopes. The firm has implemented new cost-reduction strategies to help it regain its market position and become profitable again by offering a more competitive portfolio of products.