Sales increased 20% and operating profit 143% compared to the first quarter.
SSDs account for 50% of NAND business due to increasing demand
Improved demand expected in Q3 for 5G phones and game consoles


Despite the negative impact of COVID-19, SK Hynix posted second-quarter earnings that surpassed the first quarter.

SK Hynix announced on the 23rd that, based on K-IFRS, it recorded sales of 8.6065 trillion won, operating profit of 1.9467 trillion won (operating profit margin of 23%), and net profit of 1.2643 trillion won (net profit margin of 15%) in the second quarter of this year.

Despite the uncertainty in the business environment caused by COVID-19, a favorable pricing environment was created due to strong demand for server memory, and as this was accompanied by cost reductions such as improved yield of key products, sales and operating profit in the second quarter increased by 20% and 143%, respectively, compared to the previous quarter.

In the case of DRAM, although weak demand from mobile customers persisted, sales of server and graphics products, where demand and prices were relatively robust, were increased. As a result, shipments increased by 2% compared to the previous quarter, and the average selling price rose by 15%.

NAND flash actively responded to demand for SSDs driven by favorable price trends, and the proportion of SSDs in the NAND business approached 50% for the first time. Compared to the previous quarter, shipments increased by 5% and the average selling price rose by 8%.

SK Hynix projected that "uncertainty will remain due to COVID-19 and global trade disputes" regarding the business environment in the second half of the year. However, it anticipated that "demand will improve with the partial resumption of economic activity in major countries, increased demand for 5G smartphones, and new game consoles (Sony PlayStation 5, MS Xbox Series X) scheduled for release."

Accordingly, SK Hynix announced that it will operate its products with a focus on profitability, grounded in quality competitiveness. It decided to maintain a conservative stance on facility investment and capacity management, as per existing plans.

The plan for DRAM is to continuously improve profitability by expanding sales of 10nm-class 2nd generation (1Y) mobile DRAM and to supply LPDDR5 products, which are beginning to be adopted in earnest, in a timely manner. In addition, the plan is to expand sales of high-capacity server products of 64GB or more and to begin full-scale mass production of 10nm-class 3rd generation (1Z) products.

NAND flash plans to respond to demand from mobile and game consoles and strengthen its server-oriented business capabilities through customer diversification. In particular, the company intends to continuously improve profitability by expanding customer certifications for 128-layer products.