SK Hynix Announces Record Profit Loss Due to Falling Chip Prices

SK Hynix Announces Record Profit Loss Due to Falling Jeep Prices
SK Hynix Announces Record Profit Loss Due to Falling Jeep Prices - Credit: CC0 Public Domain

SK Hynix, the world's second-largest memory chip maker, announced on Wednesday that it will cut back on investments after posting its largest operating loss ever and being hit hard by the downturn in the entire industry. The South Korean chipmaker, which supplies memory chips to Apple, cited "weak demand and sharp decline in memory chip pricing" as responsible for operating losses of 1,7 trillion won ($1,4 billion) from October to December.

This result represents the company's largest ever and its first quarterly operating loss since July-September 2012, according to Bloomberg News.

As uncertainties linger, the company said in a statement, "We will continue to reduce investments and costs while trying to minimize the impact of the downturn by prioritizing markets with strong growth potential."

According to the statement, “SK Hynix will stick to the October decision to further reduce the number of investments compared to 2022 trillion won in 19.”

Korean chip makers, led by giant Samsung Electronics, have made record profits in recent years, as the prices of their commodities soar, but the global economic downturn has hurt sales of memory chips.

According to technology research firm Gartner, global memory chip revenue fell 10% last year as electronic equipment manufacturers “started depleting the memory inventory they store in anticipation of increased demand.”

The announcement of Hynix's results followed the results of Samsung Electronics, which reported a nearly 70% drop in operating earnings in the fourth quarter, the biggest drop in more than eight years.

However, Samsung Electronic stated that despite the bad market conditions, this is a "great opportunity for us to plan for the future" and will not reduce its investments for this year.

SK Hynix predicted market conditions would improve in the second half of 2023 despite a “deeper industry downturn” in the first half of the year, adding that demand is expected to increase as more memory chips are adopted by global technology companies at lower rates.

On Wednesday, Hynix shares rose nearly 1% in Seoul.

Source: TechXplore


Günceleme: 01/02/2023 14:08

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