Sales for the first quarter of 2020: KRW 7.1989 trillion
Operating profit of 800.3 billion won, net profit of 649.1 billion won
Focus on minimizing COVID-19 risks and securing a foundation for growth.


SK Hynix announced on the 23rd that it recorded sales of KRW 7.1989 trillion, operating profit of KRW 800.3 billion (operating profit margin of 11%), and net profit of KRW 649.1 billion (net profit margin of 9%) in the first quarter of 2020 based on K-IFRS.

Despite changes in the external environment due to COVID-19, first-quarter sales and operating profit increased by 4% and 239%, respectively, compared to the previous quarter, driven by increased sales of server products, improved yields, and cost reductions.

DRAM shipments decreased by only 4% quarter-on-quarter, while mobile demand decreased due to the off-season and the impact of COVID-19. However, this was offset by strong server demand, resulting in a 3% increase in average selling price.

NAND flash shipments also increased 12% quarter-on-quarter, with the average selling price rising 7%, driven by increased demand for server SSDs.

An SK Hynix official said that while global smartphone sales are expected to decline, server memory growth is possible in the mid- to long-term as demand for non-face-to-face IT increases. However, he added that if the COVID-19 situation is prolonged, demand volatility may increase and production activities may not be smooth.

Accordingly, SK Hynix will maintain its existing plan to significantly reduce facility investment compared to last year, but will focus on process miniaturization and preparations for the M16 cleanroom, scheduled for the end of the year. The conversion of some DRAM production capacity to CIS and the conversion of NAND flash to 3D will proceed as originally planned.

The company plans to address the rapidly growing demand for high-capacity DRAM modules (64GB and above) and improve profitability by expanding sales of 10nm-class, second-generation (1Y) mobile DRAM. 10nm-class, third-generation (1Z) products will also enter mass production in the second half of the year, while also addressing the anticipated growth in the GDDR6 and HBM2E markets.

NAND flash will begin mass production of 128-layer products during the second quarter, along with an increase in the proportion of 96-layer products. Furthermore, the company plans to further increase the proportion of SSD sales, which reached 40% in the first quarter, and diversify its portfolio, focusing on PCIe SSDs for data centers, to steadily improve profitability.

Meanwhile, SK Hynix announced that it has formed a response task force since mid-January when the spread of COVID-19 began, and that all of its domestic and international fabs are currently operating normally by thoroughly complying with the recommendations of each country and regional authority.