Wednesday, April 24th 2019

SK Hynix Inc. Reports First Quarter 2019 Results

SK Hynix Inc. today announced financial results for its first quarter 2019 ended on March 31, 2019. The consolidated first quarter revenue was 6.77 trillion won while the operating profit amounted to 1.37 trillion won and the net income 1.1 trillion won. Operating margin for the quarter was 20% and net margin was 16%.

Because of a faster-than-expected price decline and lower shipments due to slowing memory demand, the revenue and the operating profit in the first quarter fell by 32% and 69%, respectively, quarter-over-quarter (QoQ). Due to seasonal slowdown and conservative server purchases, DRAM bit shipments decreased by 8% QoQ. The average selling price dropped by 27%. For NAND Flash, the average selling price decreased by 32% due to high inventory levels and intensifying competition among suppliers. The bit shipments declined by 6% QoQ.
SK Hynix plans to respond to the downturn in the memory market by focusing on technology development.

The Company will respond to the increasing demand for DRAM through technology migration. It will gradually increase the proportion of 1Xnm and start selling 1Ynm, mostly computing products, in the second half of 2019. SK Hynix intends to expand the supply of the high-density 64GB modules in line with the launch of a new server chipset that supports high-density DRAM.

For NAND Flash, SK Hynix will concentrate on improving profitability. The Company has stopped producing the 36-layer and 48-layer 3D NAND, initial 3D products which are relatively higher in cost, and will increase the proportion of 72-layer products. The Company also plans to strengthen its position in the SSD and mobile market in the second half with its 96-Layer 4D NAND. Considering the demand situation, the pace of the ramp-up of the new M15 FAB in Cheongju, Korea, will be slower than planned. As a result, SK Hynix's NAND wafer input this year is expected to decrease more than 10% compared to last year.

In the market where concerns over the uncertainty about memory demand and expectations for demand recovery coexist, SK Hynix will concentrate on cost reduction and quality assurance to secure its own competitiveness.
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3 Comments on SK Hynix Inc. Reports First Quarter 2019 Results

~Technological Technocrat~
Downturn in memory market... Well if you collude with other manufacturers to keep prices artificially inflated to stupid levels then of course the average Joe is gonna think twice about forking out money for an upgrade he might just be able to scrape by without buying
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Knowing the fickle idiocy of stock market dynamics and the degree of fear ruling them, this "downturn" (despite a net income of nearly $1 Billion US) will lead to stock dumping and a price crash, forcing yet another wave of mergers in the already small industry. Yay. I guess soon we'll be rid of memory pricing cartels - we'll have a monopoly instead!
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