SK Hynix posts first loss in 10 years from memory chip price drop
South Korean memory chipmaker SK Hynix recorded its first operating loss in ten years during the fourth quarter last year from sluggish demand and the steep drop in the price of memory chips.
The company said on Wednesday that it recorded 7.7 trillion won in revenue and an operating loss of 1.7 trillion won during the quarter. Net loss also stood at a steep 3.5 trillion won. It is SK Hynix's first quarterly operating loss since the third quarter of 2012.
After enjoying record demand prior to and during the pandemic, memory chipmakers are feeling the brunt of the global economic downturn and the war in Ukraine.
The chip business of Samsung, the world's largest memory chipmaker, barely broke even during the fourth quarter while US memory chip giant Micron also posted a loss during its latest fiscal quarter.
For the entire year of 2022, SK Hynix recorded 44.6 trillion won in revenue and 7 trillion won in operating profit. While revenue increased by 4% from 2021, operating profit dipped by 44% year-on-year.
SK Hynix said its operating profit decreased as the memory chip industry entered into a downturn starting in the second half of 2022. Uncertainties are still lingering, the company said, and it will continue to reduce investments and costs in response.
Like Samsung, SK Hynix expects the market conditions around the memory chip industry to improve in the latter part of 2023.
However, SK Hynix said Intel's launch this year of a new server CPU that adopts DDR5 is expected to increase demand for high-end AI-based memory chips.