SK Hynix Q3 Report: 24% Revenue Jump, DRAM Reversal in 2 Quarters

On the 26th of October, SK Hynix unveiled its financial report for the third quarter of the 2023 fiscal year, covering the period ending on September 30, 2023. During this quarter, SK Hynix reported a consolidated revenue of 90.662 trillion Korean won. Notably, the company experienced an operating loss of 17.92 trillion Korean won and a net loss of 21.847 trillion Korean won. The operating loss rate for this quarter stood at 20%, with the net loss rate at 24%.

This performance upswing can be attributed to heightened market demand, particularly for high-performance semiconductor memory products. Key products such as HBM3 memory tailored for AI applications, high-capacity DDR5 DRAM, and high-performance mobile DRAM exhibited robust sales momentum. In comparison to the preceding quarter, SK Hynix's operating revenue saw an impressive 24% increase, while operating losses decreased by 38%.

SK Hynix highlighted the significance of their DRAM segment, which swiftly transitioned from a loss to profitability in just two quarters, an achievement that merits attention.

The surge in operating revenue was predominantly driven by an overall increase in sales volume for DRAM and NAND flash memory, along with a notable impact stemming from the rising average selling price (ASP) of DRAM.

In terms of product performance, DRAM experienced a surge in demand, primarily driven by high-performance server-oriented products, including AI applications, resulting in a 20% increase in shipments when compared to the previous quarter, accompanied by a 10% rise in ASP. Meanwhile, NAND flash memory also recorded increased shipments in high-capacity mobile devices and solid-state drives (SSDs).

SK Hynix anticipates continued benefits in its DRAM segment, attributed to the AI-driven trend. Positive signs of improvement are also emerging in the NAND segment, which had been consistently posting losses. The company is fully committed to maintaining the overall upward trajectory in its financial performance.

The latter half of the year has witnessed a visible reduction in production by various memory suppliers. This, in turn, has generated an increased demand for semiconductor memory among customers and has led to more stable product prices.

In alignment with this emerging trend, SK Hynix has opted to escalate investments in high-value flagship products, including HBM, DDR5, LPDDR5 DRAM, and will undertake production line transformations, with a focus on the fourth-generation 10-nanometer (1a) and fifth-generation 10-nanometer (1b) DRAM. Additionally, the company will expand its investments in HBM TSV (Through Silicon Via) technology, an advanced packaging method that involves creating numerous minute holes on DRAM chips and linking upper and lower chips through vertically traversing electrodes.

Kim Yoo-hyun, the CFO of SK Hynix, articulated, "Our company stands at the forefront of the high-performance memory market and is positioned as a core entity in the realm of future AI infrastructure. Through products like HBM and DDR5 DRAM, we aspire to solidify our global leadership, ushering in new markets, and further enhancing our standing as the leading provider of high-performance, top-tier semiconductor memory solutions."