SK hynix Posts Fourth Consecutive Quarterly Loss Despite Rising Demand for Premium Chips

SEOUL - SK hynix Inc., the world's second-largest memory chip maker, continued to post losses for the fourth consecutive quarter but cited recovering demand for high-performance products as a factor in narrowing its operating deficit.

According to a new release by the Yonhap News Agency, SK hynix reported operating losses of 1.79 trillion won (US$1.32 billion) for the July-September period, compared to a profit of 1.67 trillion won a year ago.

The net losses totaled 2.18 trillion won, plunging from a net profit of 1.1 trillion won during the same period last year. The company also experienced a 17.5 percent decline in sales, which amounted to 9.06 trillion won. These losses were significantly higher than the market's average estimates, missing the mark by 74.3 percent, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

However, the chipmaker did find some bright spots. Sales of its flagship products, such as the AI memory HBM3 and high-capacity mobile DRAM, increased sales by 24 percent quarter-on-quarter and led to a 38 percent decrease in operating loss. "As market demand for our high-performance memory products continued to grow, our operating performance has steadily improved after hitting the bottom in the first quarter," the company stated.

SK hynix swung into deficit in the fourth quarter of last year for the first time since the third quarter of 2012. The company attributes this to customers halting new orders to reduce excessive inventories, fueled by sluggish consumer demand and broader economic concerns, including ongoing conflicts in Russia and Ukraine, inflation, and rising interest rates.

Looking forward, SK hynix said it will concentrate on high-performance products like high bandwidth memory (HBM) chips and fifth-generation DDR5 chips to tap into rising demand triggered by advancements in artificial intelligence. The company plans to transform its facilities rather than expanding capacity, signaling a potential increase in facility investments next year.

The chipmaker also addressed the challenges facing the NAND flash memory industry, noting that it will continue to reduce sales of NAND products and expects shipments to fall 10 percent in the next quarter.

The financial report had an immediate impact on the company’s stock, which fell 5.88 percent to close at 120,000 won on Thursday, underperforming the broader Korea Composite Stock Price Index's 2.71 percent fall.

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