Wednesday, October 23rd 2019
SK hynix Inc. Reports Third Quarter 2019 Results
SK hynix Inc. today announced financial results for its third quarter 2019 ended on September 30, 2019. The consolidated third quarter revenue was 6.84 trillion won while the operating profit amounted to 473 billion won and the net income 495 billion won. Operating margin and net margin for the quarter was 7%.
The revenue in the third quarter increased by 6% quarter-over-quarter (QoQ) as demand began to pick up. However, the operating profit fell by 26% QoQ as DRAM unit cost reduction was not enough to offset the price drop. DRAM bit shipments increased by 23% QoQ as the Company actively responded to the new products in the mobile market and purchases from some data center customers also increased. DRAM prices remained weak during the quarter, leading to a 16% drop in the average selling price, with the decline smaller than the previous quarter.
Although SK hynix actively responded to the solution market, such as high-density mobile products and SSDs, where demand continues to recover, NAND Flash bit shipments decreased by 1% QoQ because the company cut back raw NAND sales that was temporarily increased in the last quarter. It also resulted in a 4% increase in the average selling price as raw NAND is relatively cheap.
SK hynix plans to develop production and investment strategy to meet growing customer demands as well as effectively deal with demand fluctuations due to external uncertainties.
The Company is converting part of the DRAM production lines of its M10 FAB in Icheon, Korea, to CMOS image sensor (CIS) mass production lines, while reducing 2D NAND Flash wafer capacity. As a result, both DRAM and NAND Flash capacity will decrease next year compared to this year, and the amount of investment is expected to shrink considerably next year as well.
SK hynix will continue to focus on technology migration and expand sales of high-density, high-value-added products in order to achieve greater growth when the market improves.
The Company intends to increase the proportion of 1Ynm DRAM in the product portfolio to early 10% by the end of this year and prepare for mass production of the recently developed 1Znm DRAM products. In addition, the Company plans to actively respond to the LPDDR5 and HBM2E markets, both of which are expected to be increasingly adopted by customers next year.
For NAND Flash, SK hynix will increase the proportion of 96-layer 4D NAND products to more than mid-10% by the end of this year, while preparing for mass production and sales of 128-layer 4D NAND Flash. As the Company will focus on the high-end smartphone and SSD markets, SSD is expected to account for around 30% of the Company's NAND Flash sales in the fourth quarter.
SK hynix will minimize business volatility based on this experience of a downturn, while making efforts to achieve sustainable growth.
The revenue in the third quarter increased by 6% quarter-over-quarter (QoQ) as demand began to pick up. However, the operating profit fell by 26% QoQ as DRAM unit cost reduction was not enough to offset the price drop. DRAM bit shipments increased by 23% QoQ as the Company actively responded to the new products in the mobile market and purchases from some data center customers also increased. DRAM prices remained weak during the quarter, leading to a 16% drop in the average selling price, with the decline smaller than the previous quarter.
SK hynix plans to develop production and investment strategy to meet growing customer demands as well as effectively deal with demand fluctuations due to external uncertainties.
The Company is converting part of the DRAM production lines of its M10 FAB in Icheon, Korea, to CMOS image sensor (CIS) mass production lines, while reducing 2D NAND Flash wafer capacity. As a result, both DRAM and NAND Flash capacity will decrease next year compared to this year, and the amount of investment is expected to shrink considerably next year as well.
SK hynix will continue to focus on technology migration and expand sales of high-density, high-value-added products in order to achieve greater growth when the market improves.
The Company intends to increase the proportion of 1Ynm DRAM in the product portfolio to early 10% by the end of this year and prepare for mass production of the recently developed 1Znm DRAM products. In addition, the Company plans to actively respond to the LPDDR5 and HBM2E markets, both of which are expected to be increasingly adopted by customers next year.
For NAND Flash, SK hynix will increase the proportion of 96-layer 4D NAND products to more than mid-10% by the end of this year, while preparing for mass production and sales of 128-layer 4D NAND Flash. As the Company will focus on the high-end smartphone and SSD markets, SSD is expected to account for around 30% of the Company's NAND Flash sales in the fourth quarter.
SK hynix will minimize business volatility based on this experience of a downturn, while making efforts to achieve sustainable growth.
3 Comments on SK hynix Inc. Reports Third Quarter 2019 Results
Samsung Exynos 990 7nm EUV SoC with support for up to 120Hz refresh-rate displays, LPDDR5, up to 108MP camera and 5G Exynos Modem 5123 announced
Their revenues & margins will increase going forward, the key would be though how do they tackle the Chinese threat especially given China also now wants dominance in this part of the industry!