Investment plan

SK hynix posts record quarterly sales, but needs to revise its investment plan

The SK hynix logo is seen atop the company’s semiconductor plant in this aerial photograph taken over Icheon, Gyeonggi province, July 22, 2019. (Bloomberg-Yonhap)

SK hynix on Wednesday reported record quarterly revenue of 13.81 trillion won ($10.6 billion) from April to June, but said it would review investment plans next year, citing global economic uncertainties and weakening market demand. The world’s second-largest memory chipmaker also saw its operating profit jump 47% from the previous quarter to 4.19 trillion won.

“Although DRAM product prices declined in the second quarter, NAND prices increased and overall sales volume increased, resulting in increased revenue,” an SK hynix official said.

The official said the continued strong dollar and the addition of Solidigm’s earnings were also positive factors. Solidigm, now a US subsidiary of SK hynix, was created following the South Korean chipmaker’s takeover of Intel’s NAND Flash business unit in December last year.

The chipmaker said record second-quarter profits were significant as the numbers were hit amid tough business situations such as global inflation, the protracted Russia-Ukraine conflict and shutdowns in some regions. Chinese.

The company predicted that demand for memory semiconductors will slow in the second half of this year as shipments of computers and smartphones using memory chips are expected to decline from previous forecasts.

Demand for server memory chips, which are supplied to companies operating data centers, could also stagnate as customers will first use chips they have already secured, according to SK hynix.

“The inventory level is increasing among the memory chip industry and customers. It is inevitable to adjust next year’s (capital expenditure),” said Noh Jong-won, chief marketing officer of SK hynix, during the conference call.

“Consumer sentiment is contracting on inflation and growing concerns about the economic recession as companies visibly attempt to cut costs. Although the supply chain issue was gradually resolved in the first half, we are facing a real drop in demand in the second half of the year,” he added.

Earlier, SK hynix delayed its decision to invest 4 trillion won in building a new factory at its chip production campus in Cheongju, North Chungcheong Province, at a board meeting in Beijing. administration held last month. Construction was originally scheduled to begin early next year and should be completed by 2025.

By Kan Hyeong-woo ([email protected])