- South-Korea headquartered semiconductor company has reported its Q1 2020 financial results
- The company said that demand for IT products and services will drive the growth of server memory demand
- It will start mass-manufacturing 128-layer products in the second quarter of this year
SK Hynix has today announced financial results for its first quarter 2020 ended on 31 March 2020. The consolidated revenue of first quarter 2020, as reported, was 7.20 trillion won while the operating profit amounted to 800 billion won, and the net income 649 billion won. Company’s operating margin for the quarter was 11 per cent and net margin was nine per cent.
“Despite abrupt changes of external business conditions due to COVID-19, our first quarter revenue and operating income increased by four per cent and 239 per cent quarter-over-quarter (QoQ) respectively, driven by increased sales of server products, yield rates improvement, and cost reduction,” read SK Hynix’s official statement.
Preparing for road ahead with Covid 19 in consideration
Regarding future global memory semiconductor market, SK Hynix sees unprecedented uncertainties upon general market forecast. The company said it will seek to fortify its fundamental competitiveness and prepare itself for further demand fluctuation in the future.
SK Hynix expects that the global smartphone sales will decline. It also feels demand for IT products and services based on social distancing trend will drive the growth of server memory demand in mid- to long-term. Nevertheless, the company also explained that if COVID-19 pandemic is prolonged, it will lead to increased demand volatility of global market and might disrupt production activities.
“SK Hynix will minimize potential risks caused by COVID-19, and set up future technology innovation and infrastructure to timely react to 5G and server-based growth momentum,” stated Jin-Seok Cha, VP and head of finance (CFO) at SK Hynix.
SK Hynix’s DRAM bit shipments declined
For DRAM, strong demand of server clients offset the weak mobile demand which declined due to both seasonal slowdown and the COVID-19 impact. As a result, the SK Hynix’s DRAM bit shipments declined by four per cent QoQ and DRAM average selling price increased by three per cent QoQ.
“For NAND Flash, the favorable demand of server solid state drives (SSDs) led to 12 per cent increase of bit shipments and seven per cent increase of average selling price QoQ respectively. For DRAM, SK Hynix will proactively respond to rapidly increasing demand for high-capacity server modules larger than 64 Gigabytes (GB), and expand 1Ynm mobile DRAM sales in order to improve profitability. At the same time, the company will begin mass production of 1Znm DRAM products in the second half of this year and timely react to both GDDR6 and HBM2E markets, which are expected to begin full-fledged growth,” read company’s official statement.
It continued, “For NAND Flash, the Company will increase the sales portion of 96-layer NAND Flash and start mass production of 128-layer products in the second quarter of this year. Additionally, SK Hynix will expand sales proportion of SSD products which already reached 40 per cent among its NAND Flash sales in the first quarter, and diversify its portfolio with PCIe SSDs for data centers to improve profitability.”
