3 trillion more than 'Super boom period' 2018
Operating profit 2.8. trillion…24%profit rate
The combined effect of incorporation of ‘Solidigm’ as subsidary
Server demand increases as data center

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SK hynixhitthe record sales as of the first quarter in their history. This is a performance that exceed the super boom of semiconductors in 2018. SK hynix announced on the 27ththat they recorded 12.1557 trillion KRW in sales and 2.8596 trillion KRW in operating profit in the first quarter of this year. Compared to the same period of last year, sales and operating profit rose 43% and 116%, respectively. Operating profit ratio was around 24%. Although first quarter is considered as off-season in semiconductor industry, they achieve more than 12 trillion KRW in sales. It is way over the sales during super boom phase in the first quarter of 2018, which was about 8.7197 trillion KRW. The operating profit became the second highest after the first quarter of 2018.

It is analyzed that incorporation of Solidigm into SK hynix effected the first quarter sales of SK hynix with their additional sales. Even though high demand for mobile memory during COVID-19 has recently decreased, however, demand for server memory for data centers has offset this. Myung-soo Park, vice president of DRAM marketing at SK hynix, said, "As investment in new data centers has been delayed (to this year) due to COVID-19 last year, strong demand for servers will play a role this year. There are plans to build data centers as much as 2018 that boomed in the cloud sector, so our prediction is positive.”

SK hynix decided to account for a one-time sales guarantee provision of 380 billion KRW in the first quarter. This is because there was quality issue of DRAM sold in the past. SK hynix completes the analysis of the cause of the quality issue and proceeds with compensation procedures such as product exchange after consulting with customers. Jong-won Noh, president of SK Hynix's business, said, "Product exchange will take place over about two years. We will maintain top-tier quality."

Even with the one-time cost occurred in the first quarter, it is expected that technology development and production of next-generation products will proceed as scheduled, and will not affect the subsequent quarter's earnings. SK hynix is increasing the yield of 10nano 4th Gen. (1a) DRAM and 176-layer 4D NAND products and increasing the proportion of production. It is also known that the development of next-generation products is progressing smoothly. President Noh said, “As the demand for server products grows, the market of memory semiconductor will improve toward the second half of the year.Although there are minor difficulties in supply and demand for equipment, we will continue to expand the process yield so that there is no setback in meeting customer demand.”

On the same day, SK hynix announced that in order to strengthen the independency and diversity of directors’ activity, they revised ‘Outside Director Candidate Recommendation Committee Regulations'. They explained, “We will strengthen the verification process for outside director candidates and expand the recommendation and appointment of female outside director candidates from an ESG management perspective and stipulate this into the regulation”

Comparison of SK hynix's first quarter of 2022 business performance

<Source = SK hynix>

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By Staff Reporter Dong-jun Kwon (djkwon@etnews.com)