SK Hynix recorded an operating profit of 5.126 trillion won despite the massive spread of Corona 19 last year. It is a performance that exceeds market expectations.
On the 29th, SK Hynix announced through the Financial Supervisory Service’s electronic disclosure system that it recorded sales of 31.90 trillion won and operating profit of 5.126 trillion won (operating margin of 16%) last year.
This is a year-on-year increase of 18% in sales and 84% in operating profit. The earnings consensus (average of stock price estimates) of F&Guide, a securities information company, was KRW 31.45 trillion in sales and KRW 4,951.2 billion in operating profit.
Jong-won Noh, vice president of management support at SK Hynix, said, “The memory market showed a sluggish trend last year due to the intensifying global pandemic and trade conflict.” We have stably mass-produced our flagship products.
In addition, he added, “By expanding our server market share based on quality competitiveness, our sales and operating profit increased by 18% and 84%, respectively, compared to the previous year.”
In the fourth quarter of last year, it announced that it recorded sales of 7,9662 trillion won and operating profit of 9659 billion won (operating margin of 12%). This is a 15% increase in sales and 298% in operating profit compared to the same period last year. Compared to the previous quarter, sales and operating profit decreased by 2% and 26%.
SK Hynix said, “We achieved a 298% increase in operating profit compared to the same period last year by actively responding to strong mobile demand, which continued from the third quarter, despite a decline in sales and a weak dollar due to falling prices.”
By product, DRAM shipments increased 11% QoQ, and average selling price fell 7%. For NAND flash, shipments increased by 8% and average selling price fell by 8%.
In this year’s DRAM market outlook, global companies’ investment in new data centers is expected to increase the demand for server products. In addition, it is expected that mobile demand will remain high as shipments of 5G smartphones, which had been stagnant due to Corona 19, increase.
However, it predicted that the supply would not meet demand as the industry’s supply increase was expected to be limited.
In the NAND flash market, the market is expected to recover from the second half of the year as high-capacity products for mobile devices and solid state drive (SSD) demand are strong.
SK hynix is planning to actively respond to the demand environment this year and promote a strategy to strengthen technology leadership while increasing the proportion of strategic product sales.
In detail, DRAM is increasing the proportion of high-value-added products such as high-bandwidth memory (HBM2E) as the market for high-performance computing and artificial intelligence (AI) systems grows. NAND Flash plans to diversify its products by promoting customer certification for SSDs for 128-layer servers.
In addition, the company plans to increase its cost competitiveness by producing the 4th generation of DRAM 10-nano class (1a nanometer) and NAND flash 176-layer 4D products with improved productivity compared to the existing products.
SK Hynix is also launching its financial story in earnest starting this year. Earlier, in October of last year, SK Hynix announced a financial story, a vision of contributing to humanity and society by promoting balanced growth in DRAM and NAND flash businesses and strengthening ESG (eco-friendly, social, governance) management.
First of all, it plans to actively build the foundation for future growth, such as smoothly proceeding with the acquisition of Intel’s NAND business division and operating a new M16 fab in Icheon, Gyeonggi Province. In addition, from the perspective of ESG, the ESG Management Committee will be established to prepare a strategy to create new opportunities in this field.
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SK hynix recently signed up for RE100 (declared to use 100% renewable energy by 2050) and expressed its willingness to strengthen ESG management by issuing a green bond for investment in eco-friendly business.
Meanwhile, SK Hynix decided to pay a dividend per share of 1170 won. Dividend per share was set in accordance with the existing dividend policy, which fixed a minimum amount of KRW 1,000 and paid an additional 5% of the annual free cash flow.