Despite the COVID-19 crisis, SK Hynix's business performance surpassed market expectations in the first quarter of 2020.
SK Hynix recorded sales of 7.1 trillion won, operating profit of 800.3 billion won (some $656 million), and net profit of 649.1 billion won ($532 million) in the first quarter based on consolidation, the company announced on April 23.
Its sales and operating profit rose 4 percent and 239 percent, respectively, from the fourth quarter of last year. Compared to the same period last year, sales rose 6.3 percent, but operating profit fell 41.4 percent.
DRAM and NAND flash prices, which have risen in earnest this year, led the positive performance. In the first quarter, SK Hynix’s shipments of DRAMs fell 4 percent from the previous quarter, while average sales price (ASP) rose 3 percent.
"Although demand for mobile DRAM has decreased significantly due to off-season and COVID-19 effects, demand for DRAMs and SSDs for servers has increased significantly due to untact effects, offsetting a decrease in demand for mobile devices," said an official of SK Hynix.
"In particular, the supply of memory for PCs is insufficient due to demand for home and study," he said.
Sales of SSDs, which are recording losses, have increased significantly, resulting in improved production costs.
SK hynix said it will strengthen its original competitiveness despite uncertainties and thoroughly prepare for fluctuations in demand.
It will maintain its existing plan to reduce investment in facilities significantly compared to last year, but will make every effort to prepare for M16 clean room planned for the end of the year. In addition, the company will convert some of its DRAM production lines into CMOS Image Sensor production lines and convert 2D NAND flash into 3D NAND flash.
In the case of DRAM, the company will actively respond to the rapidly increasing demand for high-capacity server modules of 64GB or more and improve profitability by expanding sales of 10-nano second-generation mobile DRAMs.
It is also planning to start mass-producing 10-nano 3rd generation products in the second half of this year and actively respond to GDDR6 and HBM2E markets that are expected to grow in earnest.
Meanwhile, SK hynix said it has formed a response TF since mid-January when the spread of COVID-19 began, and that all domestic and foreign semiconductor plants (FABs) have been operating normally so far as it has thoroughly complied with the recommendations of each country and regional authorities.
