It's a great time to buy DRAM and NAND, not to sell – just ask SK Hynix

Chip flinger slams brakes on production as it waits for demand to pick up

Oversupply in the memory market has savaged SK Hynix's first-quarter 2019 results, but the Korean chip flinger hopes for an improvement after June.

The vendor reported revenues for the quarter ended March 31, 2019 at ₩6.8 trillion ($5.86bn), a 22 per cent drop year-on-year, while profit fell 65 per cent to ₩1.1 trillion ($948m).

SK Hynix makes both DRAM and NAND. DRAM bit shipments were up about 10 per cent on the year prior but fell 8 per cent from the last quarter. Average selling prices (ASP) for DRAM fell more than 30 per cent on the year, according to Wells Fargo senior analyst Aaron Rakers. However, the company hopes to see 15-20 per cent DRAM bit growth this year.

It's not going to increase DRAM wafer capacities, focusing instead on technology transitions to smaller memory cells and so getting more memory bits from the existing wafer capacity. It will gradually increase the proportion of 1Xnm (16nm to 19nm) technology and start selling the smaller 1Ynm (approx 14nm to 16nm process) technology product in the second half.

NAND bit shipments increased in the 45 per cent to 50 per cent range year-on-year, but ASPs slumped 50 per cent or so due to intense competition. SK Hynix will reduce its NAND wafer capacity by more than 10 per cent while expecting bit growth of 35 per cent or more this year. The bit growth will come from increasing the 3D NAND layer count from 72 to 96 layers, with 96-layer production starting in the third quarter. That means it is already behind Micron, Samsung and Western Digital/Toshiba, which are all manufacturing 96-layer product already.

SK Hynix has also stopped producing 36- and 48-layer 3D NAND.

Rakers said the company took a ₩400bn (~$345m) inventory writedown during the March quarter because of NAND price declines and the startup costs of its M15 fab. Inventory levels rose 65 per cent on the year in the quarter to ₩5.117tn ($4.41bn) and that inventory will need clearing.

SK Hynix has to keep up with technology growth to avoid falling behind its competitors as it looks to the second half of the year for a demand pickup. ®

Similar topics

Other stories you might like

  • Think your phone is snooping on you? Hold my beer, says basic physics

    Information wants to be free, and it's making its escape

    Opinion Forget the Singularity. That modern myth where AI learns to improve itself in an exponential feedback loop towards evil godhood ain't gonna happen. Spacetime itself sets hard limits on how fast information can be gathered and processed, no matter how clever you are.

    What we should expect in its place is the robot panopticon, a relatively dumb system with near-divine powers of perception. That's something the same laws of physics that prevent the Godbot practically guarantee. The latest foreshadowing of mankind's fate? The Ethernet cable.

    By itself, last week's story of a researcher picking up and decoding the unintended wireless emissions of an Ethernet cable is mildly interesting. It was the most labby of lab-based demos, with every possible tweak applied to maximise the chances of it working. It's not even as if it's a new discovery. The effect and its security implications have been known since the Second World War, when Bell Labs demonstrated to the US Army that a wired teleprinter encoder called SIGTOT was vulnerable. It could be monitored at a distance and the unencrypted messages extracted by the radio pulses it gave off in operation.

    Continue reading
  • What do you mean you gave the boss THAT version of the report? Oh, ****ing ****balls

    Say what you mean

    NSFW Who, Me? Ever written that angry email and accidentally hit send instead of delete? Take a trip back to the 1990s equivalent with a slightly NSFW Who, Me?

    Our story, from "Matt", flings us back the best part of 30 years to an era when mobile telephones were the preserve of the young, upwardly mobile professionals and fixed lines ruled the roost for more than just your senior relatives.

    Back then, Matt was working for a UK-based fixed-line telephone operator. He was dealing with a telephone exchange which served a relatively large town. "I ran a reasonably ordinary, read-only command to interrogate a specific setting," he told us.

    Continue reading
  • Chinese tech minister says he's 'dealt with' 73,000 websites that breached the law

    Ongoing crackdown saw apps 1.83 million apps tested, 4,200 told to clean up their act, pop-up ads popped

    China's Minister of Industry and Information Technology, Xiao Yaqing, has given a rare interview in which he signalled the nation's crackdown on the internet and predatory companies will continue.

    The interview, reported in state-controlled organ Xinhua, reveals that China's recent crackdowns on inappropriate content and companies with monopolistic tendencies have both bitten – hard.

    The nation investigated 1.83 million apps to ensure they don't infringe users' rights. Some 4,200 illegal apps found to require "rectification".

    Continue reading

Biting the hand that feeds IT © 1998–2021