Wednesday, July 22nd 2020

SK hynix Inc. Reports Second Quarter 2020 Results

SK hynix Inc. today announced financial results for its second quarter 2020 ended on June 30, 2020. The consolidated revenue of second quarter 2020 was 8.607 trillion won while the operating profit amounted to 1.947 trillion won, and the net income 1.264 trillion won. Operating margin for the quarter was 23% and net margin was 15%.

Despite uncertainties of business environment due to COVID-19, both the Company's revenue and operating income increased by 20% and 143% quarter-over-quarter (QoQ) 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, SK hynix managed to expand sales of both server and graphics products as demand and price of these markets remained stable. Consequently, both DRAM bit shipment and average selling price increased by 2% and 15% QoQ respectively.

For NAND Flash, SK hynix proactively responded to the demand for SSD products. With the favorable price flow of the market, the Company's SSD business accounted for nearly 50% of its NAND Flash business for the first time. As a result, the NAND Flash bit shipment and average selling price increased by 5% and 8% QoQ respectively.

Regarding business environment in the second half of this year, SK hynix sees uncertainties due to COVID-19 and the global trade dispute. However, it anticipates 5G smartphones and next-generation 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, SK hynix will expand 1Y nm 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, the Company will focus on expanding the sales of high-capacity server products larger than 64 Gigabytes (GB), and proceed with the full-scale mass-production of 1Znm DRAM products.

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

Jin-Seok Cha, Vice President and Head of Finance (CFO) at SK hynix stated, "SK hynix will flexibly cope with changes in the external business environment, and prepare the foundation for sustainable growth in the second half of the year."
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