SK Hynix's performance worsened last year, recording a loss in the fourth quarter due to the semiconductor market slump.

SK Hynix announced its 2022 business performance on the 1st. According to it, sales in 2022 recorded KRW 44.6481 trillion based on consolidated financial statements, up 3.8% year-on-year, while operating profit decreased by 43.5% year-on-year to KRW 7.066 trillion. Net income for the period decreased by 74.6% year-on-year to KRW 2.4389 trillion.

According to consolidated financial statements, sales for the fourth quarter of 2022 were KRW 7.6986 trillion, a 37.8% decrease from the same period last year, and operating profit recorded a deficit of KRW 1.7012 trillion. Net income recorded a deficit of 3.5235 trillion won.

In response, SK Hynix stated that the company's operating performance in the fourth quarter turned into a deficit as memory demand decreased and product prices fell sharply starting in the second half of the year.

It is analyzed that the memory industry slowed down significantly in the second half of last year due to sluggish IT demand and reduced investment in data centers, and sales continued to decline due to falling prices.

An SK Hynix official said, “Sales growth continued last year, but operating profit decreased year-on-year due to the semiconductor downturn that continued in the second half of the year.” He added, “As uncertainty in the business environment increases, the company is reducing investments and costs and focusing on markets with high growth potential to minimize the impact of the deteriorating business conditions.”

An SK Hynix official said, “The downturn is also worsening in the first half of this year, but looking at 2023 as a whole, we expect the market situation to improve as we move into the second half.”

The industry predicts that inventory will peak in the first half of the year and gradually decrease as supply from memory semiconductor companies does not increase due to reduced investment and production cuts.

The company also forecasts that market demand will gradually rebound as IT companies increase the use of memory semiconductors, the prices of which have fallen significantly compared to their peaks.

SK hynix Vice President (CFO) Woo-Hyun Kim said, “We are paying attention to the positive signals coming out of the market that Intel has recently released a new CPU that uses DDR5 and that there may be demand for new server memory based on AI.” He added, “As we have secured the world’s best technology in DDR5 for data centers and 176-layer NAND-based enterprise SSDs, we expect to make a quick turnaround when the market rebounds.”
/> Meanwhile, SK Hynix announced that it would maintain the policy of reducing this year's investment scale by more than 50% compared to 2022's 19 trillion won, as announced in its performance announcement in October last year. However, the company plans to continue investing in mass production of main products such as DDR5/LPDDR5 and HBM3 and future growth areas.

Vice President Kim Woo-hyun said, “We will do our best to overcome this downturn and arm ourselves with a more solid constitution so that we can make a bigger leap forward as a global first-class technology company.”