SK Hynix reports record quarterly loss, sees memory chip glut easing in second half
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SK hynix said production cuts by memory chipmakers will improve market conditions from the second half of 2023.
PHOTO: REUTERS
SEOUL – South Korea’s SK hynix on Wednesday said production cuts by memory chipmakers will improve market conditions from the second half of 2023, after it reported a record operating loss for the first quarter.
The wider loss came as shipments of chip-equipped devices weakened due to a global economic slowdown, worsening a supply glut and pushing down prices, the world’s second-biggest maker of memory chips said.
SK hynix reported a January-March operating loss of 3.4 trillion won (S$3.4 billion), matching analyst estimates and reversing the previous year’s 2.9 trillion won profit.
The loss is the deepest since SK Group acquired Hynix in 2012, and the second in a row after October-December’s 1.9 trillion won loss. Revenue fell 58 per cent to 5.1 trillion won.
It said: “We likely cannot expect a dramatic increase in prices in the second quarter given current demand...
“But with effects of production cuts appearing from the second quarter, we expect the supply-and-demand situation to improve from the third quarter.”
Earlier in April, compatriot Samsung Electronics, the world’s largest memory chipmaker, said it would make a rare production cut as a drop in demand sent prices plummeting.
United States rival Micron Technology cut fiscal 2023 investment to about US$7 billion (S$9.4 billion) from US$12 billion a year earlier.
On Wednesday, SK hynix said it is continuing to adjust production. It forecast artificial intelligence uses to drive an increase in memory chip revenue by 30 per cent or more in the next five years.
After its comments, its shares traded up as much as 3.7 per cent versus a 0.1 per cent rise in the wider market.
“Memory chips are in serious oversupply... So SK hynix signalling continued production cuts lifted shares,” said analyst Kim Sun-woo of Meritz Securities.
“Specifically mentioning its sales shipments in the second quarter will see double-digit growth and offset first-quarter decline also sent the message that the bottom is past.” REUTERS
