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2023: The year SK Hynix expects profit-whacking dip to end, and 238 layer RAM to debut
Reduces investments and production as buying cycles bite
South Korean memory maker SK hynix has posted a grim set of financial results, but the company has pinned its hopes for an eventual turnaround on its development of beautiful new tech.
On Wednesday, the chip slinger reported overall operating profit plummeted 60 percent year-on-year for Q3 2022 to ₩1.7 trillion ($1.2 billion). Revenue fell seven percent year-on-year to ₩11 trillion ($7.7 billion) and net profit fell 67 percent year-on-year to ₩1.10 trillion ($771 million).
Thirty-one percent of the quarter's revenue came from NAND chips, with servers making up the largest chunk, and 64 percent from DRAM.
Speaking on an earnings call that was translated into English in real time, company execs reported that all is well inside the company's product development ops. Research on 238-layer memory has gone so splendidly that the company will put it into production next year.
"We foresee no complications in development and mass production of the 238 layer," said one exec during the quarterly call. "Our plan is to mass produce 238 layer by 2023." Sadly execs didn't detail the kind of products and capacity the new tech will produce.
- SK hynix, Samsung, TSMC granted one-year reprieve from China chip restrictions
- TSMC downgraded as analysts warn of worst slump in a decade
- China chip imports down 12.4% as tech trade war with US intensifies
- Samsung, TSMC in US patent infringement investigation
SK hynix leadership said the profit dive was not unexpected because the memory biz is cyclical, but also labelled the current downturn "unprecedented" thanks to macroeconomic uncertainties and geopolitical issues.
The company has therefore decided to reduce its investments by over half of planned spend next year. Production volumes of less-profitable products will also be dropped.
Execs said although DRAM suppliers and customers are going through a hard time, there is some expectation that the market will rebound.
However, because the NAND market is more affected by complicated geopolitical issues and price elasticity, it will have more difficulty recovering.
"So that means when the macroeconomic uncertainties and geopolitical issues ease would be when the memory market can also look forward to an upturn," an exec said. "Of course, there is going to be some time lapse between the two events."
"Given this picture, hopefully the market will start to stabilize in the second half of next year. That is our expectation and hope," predicted the SK hynix exec, with the caveat that he could not rule out the possibility of an extended downturn.
"But bit growth will be limited next year and perhaps none from the DRAM side, so this is by no means the healthy picture that we want," he added. He then predicted DRAM would have a strong enough force for restoration "sometime next year."
"Likewise for NAND. It would move in the same track as DRAM, although it might take longer."
Earlier this month, SK hynix was one of several companies given a one-year exemption from US Department of Commerce restrictions that ban exports of advanced chips and equipment to China. ®