SK Hynix Inc., the world’s second-largest memory chip manufacturer, announced that it plans to increase its memory production capital expenditure. Due to the electronics industry’s growing memory chip demand, SK Hynix’s net income jumped to 993 billion won ($894 million). For the first quarter, the semiconductor supplier also reported that its operating profit reached 1.32 trillion won ($1.18 billion), while its sales amounted to 8.49 trillion won ($7.6 billion).
Usually, the first quarter is the semiconductor industry’s off-season. However, SK Hynix saw a product yield surge and a high memory product demand, especially in smartphone and PC manufacturers. Compared to the same period last year, SK Hynix’s operating profit and revenue increased by 37% and 7%, respectively. The IT market conditions continue to improve and show a strong performance, inducing a higher-than-anticipated semiconductor memory demand growth.
According to SK Hynix, the semiconductor demand surge from the automobile, consumer electronics, and other tech-centered industries would push on. Furthermore, SK Hynix forecasts a 20% increase in DRAM chip demands and a mid-30% growth in NAND Flash. The company also anticipates its key customers’ chip inventory to drop rapidly. Accordingly, SK Hynix regularly reviews various strategies that could alleviate the tightening global chip shortage.
Responding to Future Market Outlooks
In response to upcoming market conditions, SK Hynix would transfer a portion of its 2022 capital expenditure into this year. The company explained that it would use the additional fund to procure more chip-making equipment. SK Hynix would also proactively expand its DRAM and NAND production during 2021’s second half.
“We expect our chip inventory to remain tight throughout the year and become even tighter in the second half of this year,” said Noh Jong-Won, Executive VP of SK Hynix’s Corporate Center. SK Hynix would develop high-capacity, 12GB DRAM-based multi-chip modules during the second quarter for its DRAM chip supply. The company would also expand its 1Znm DRAM production volume and complete the new 1Anm technology’s development using EUV equipment.
Earlier, SK Hynix Co-CEO Park Jung-Ho also shared that SK Hynix considers expanding its foundry businesses. Moreover, the chipmaker’s foundry service expansion and its partnerships with other semiconductor firms would significantly relieve the global chip shortage. In addition to increasing DRAM and NAND production, SK Hynix plans to boost its commitment to ESG management.
“The company will make its utmost efforts to help the semiconductor industry lead the ESG management while raising the level of RE100 by actively developing eco-friendly technologies,” said Noh. Noh also shared that SK Hynix participated in the Semiconductor and Display Carbon Neutrality Committee to uphold ESG management activities. Additionally, SK Hynix has been heightening the company’s board of directors’ responsibility as part of the ESG initiative.
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