SK Hynix posts record first quarter operating loss
Hardware

SK Hynix posts record first quarter operating loss

For second-largest memory maker SK hynix, the first quarter of this year was marked by continued oversupply in the market due to the deteriorating macroeconomic environment. Demand for storage remained low and prices continued to fall, bringing operating losses to a record $2.54 billion for the period.

    Image source: SKhynix

Image source: SKhynix

The result was in line with analysts’ expectations, with the company posting an operating loss of this magnitude for the first time since 2012 when SK Group bought then-independent Hynix. This is the second consecutive quarter that SK hynix has posted an operating loss. The company’s revenue fell 58% year over year to $3.8 billion.

Interestingly, the company’s stock rose a few percent after the earnings release as management said the memory market bottomed in the first quarter and will begin its recovery in the second half of the year. According to representatives of SK hynix, memory demand will already increase with prices in the current quarter.

A series of cuts in memory production led to a decrease in customer inventories in the first quarter. In part, the stock market was playing back early news of competitor Samsung Electronics’ decision to reduce memory performance. I have to say that SK Hynix representatives have previously spoken about the storage market’s ability to start recovering in the second half of the year.

DRAM chip prices will continue to fall this quarter, according to analysts at Yuanta Securities. They fell 20% in the first quarter and more than 30% in the fourth before that. Any early recovery in SK hynix revenue could be hampered by US sanctions against China, as the authorities of the first country not only do not welcome the expansion of memory production in China, but also seek to prevent Korean manufacturers from expanding memory supplies to the Chinese market in the event of a boycott of Micron products by the PRC authorities under the pretext of their insecurity. SK Hynix in China produces between a third and half of all DRAM memory that is shipped to the world market.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

Add Comment

Click here to post a comment