▲ SK Hynix headquarters [Photo = SK Hynix]

SK Hynix CFO Jong-won Noh said, “In 2020, we steadily mass-produced our main products, including the third-generation 10nm-class (1z) DRAM and 128-layer NAND flash,” adding, “We expanded our server market share, achieving year-on-year increases in sales and operating profit by 18% and 84%, respectively.”

In the fourth quarter of 2020, sales reached KRW 7.9662 trillion, operating profit reached KRW 965.9 billion, and operating profit margin reached 12%. The company stated, "Despite a decline in sales due to price declines and a weaker dollar, we achieved operating profit, a 298% increase year-over-year, driven by strong mobile demand that has continued since the third quarter."

DRAM shipments increased 11% quarter-over-quarter, while average selling prices fell 7%. NAND flash shipments increased 8%, while average selling price decreased 8%.

◇ DRAM supply shortage this year, NAND recovery in the second half

SK Hynix forecasts that demand for server-oriented products will increase this year due to global companies' investments in new data centers in the DRAM market.

5G smartphone shipments are also expected to increase, maintaining high mobile demand. However, supply is expected to fall short of demand, with industry supply growth expected to be limited.

The NAND flash market is expected to recover in the second half of the year, driven by increased adoption of high-capacity products in mobile devices, strong demand for SSDs, and the resolution of high inventory levels across the industry in the first half of the year.

◇ 1a DRAM and 176-layer 4D NAND to be produced within the year.

SK Hynix plans to increase shipments of high-value-added products, such as HBM2E, in the DRAM segment. In the NAND flash segment, the company plans to diversify its product line, including pursuing customer certification for 128-layer server-grade SSDs.

The company plans to increase cost competitiveness by producing 4th generation 10nm-class (1a) DRAM and 176-layer 4D NAND flash products with improved productivity compared to existing products within the year.

He also emphasized that the company will expedite the acquisition of Intel's NAND business and establish a foundation for future growth, including full-scale operation of the new M16 fab. He also established a new ESG Management Committee.

Meanwhile, SK Hynix has set its dividend per share at 1,170 won. This is based on its existing dividend policy, which sets a minimum dividend of 1,000 won per share and pays an additional 5% of annual free cash flow.