SK hynix Inc. (or "the company") reported today financial results for 2022 ended on December 31. The company recorded revenues of 44.648 trillion won, an operating profit of 7.007 trillion won and a net income of 2.439 trillion won. Operating and net profit margin for the full year was 16% and 5%, respectively. "Revenues continued to grow last year, but the operating profit decreased compared with a year earlier as the industry entered into a downturn from the second half," the company said. "With uncertainties still lingering, we will continue to reduce investments and costs, while trying to minimize the impact of the downturn by prioritizing markets with high growth potential."

In 2022, SK hynix increased high-capacity DRAM shipments for server/PC markets, while boosting sales of DDR5 and HBM - of which products that the company has a solid market leadership - to customers in the growing markets of AI, Big Data, and cloud computing. Particularly, revenues for the data center SSD more than quadrupled compared with a year earlier.However, SK hynix recorded an operating loss in the fourth quarter of last year due to weak demand and a sharp fall in memory-chip prices. The revenues for the three months on a consolidated basis were 7.699 trillion won, while the operating loss amounted to 1.701 trillion won (operating loss ratio at 22%) and net loss was at 3.524 trillion won (net loss ratio at 46%). The latest result was the first quarterly operating loss since the third quarter of 2012.

"Despite a deeper industry downturn in the first half, SK hynix forecasts market conditions to gradually improve into the latter part of the year," the company said. "Industry experts do not expect an increase in supply of memory chips as market players are planning to reduce investments and production, which will lead the inventories to peak within the first half."

In addition, SK hynix forecasts a gradual recovery in demand as global tech companies start to adopt more memory chips as the prices are low.

"Intel's launch of new server CPU adopting DDR5 and apparent positive signs of demand for new AI-based server memory chips bode well for a quick business turnaround," Chief Financial Officer Kim Woohyun said. "With the world's best technologies for DDR5 for data centers and 176-layer NAND flash-based enterprise SSD, we expect to see a quick turnaround when the market bottoms out."

SK hynix will stay with the decision announced in October to more than halve the volume of investments compared with 19 trillion won in 2022. However, investments for mass production of mainstream products such as DDR5, LPDDR5, and HBM3 and markets with growth potential will be continued.

"A successful overcome of the current downturn will help us strengthen fundamental business competitiveness before eventually leaping forward as a leading technology company," Kim said.

Please note that the financial results discussed herein are preliminary and speak only as of December 31, 2022. Readers should not assume that this information remains operative at a later time. In addition, this information may include forward-looking statements that involve a variety of risks and uncertainties that could cause actual results to differ materially. For further discussion of these risks and uncertainties, readers should refer to SK hynix Inc.'s filing with the Korea Exchange. This document is neither an offer to sell nor a solicitation of an offer to sell any security of SK hynix Inc.

"These materials are not an offer for sale of the securities of SK hynix Inc. in the United States. The securities may not be offered or sold in the United States absent registration with the U.S. Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. SK hynix Inc. does not intend to register any offering in the United States or to conduct a public offering of securities in the United States."