SK Hynix's second-quarter earnings report strong as chip demand grows

According to Yonhap News Agency, SK Hynix, South Korea's second largest chipmaker, released its second quarter financial report on July 27. Thanks to the strong demand for memory chips in the global market, the company's profits rose rapidly in the second quarter.

According to the financial report, SK Hynix's revenue in the second quarter of fiscal year 2021 was 10.322 trillion won (about 9 billion US dollars), while analysts expected 9.79 trillion won, an increase of 19.9%. This is the first time that it has exceeded 10 trillion won since the third quarter of 2018 (July-September). The operating profit in the second quarter was 2.695 trillion won, while analysts expected 2.61 trillion won, an increase of 38.3% over the same period last year. The net profit in the second quarter was 1.988 trillion won, an increase of 56.5% over the same period last year.

SK Hynix said that the rapid surge in demand for PCs, graphics cards and consumer DRAM (dynamic random access memory), and the recovery of server demand in the April-June period, together led to improved business performance. In addition, increased sales of advanced process products such as 128-layer NAND flash memory helped improve cost competitiveness and increase revenue and operating profit.

SK Hynix said it expects favorable conditions in the memory market to continue into the second half of 2021, driven in part by seasonal demand. Specifically, demand for NAND flash products will increase as high-capacity storage devices become more popular in mobile devices, while demand for enterprise solid-state drives will also increase.

In terms of DRAM, SK Hynix said it plans to increase sales of high-capacity server DRAM above 64GB. In addition, the company also plans to supply DRAM products produced using extreme ultraviolet (EUV) lithography technology from the second half of this year.

For NAND flash memory, SK Hynix said it will increase sales of 128-layer mobile solution products and enterprise-class solid-state drives, hoping to achieve a turnaround in the third quarter. The company also plans to mass-produce 176-layer NAND flash memory later this year. SK Hynix said that in the second quarter of this year, 128-layer NAND accounted for more than 50% of sales. The company expects that by the end of this year, the total sales share of 128-layer and 176-layer NAND will be close to 80%.

Last October, SK Hynix signed an agreement to acquire Intel's NAND business for $9 billion. Industry insiders pointed out that in the long run, if the transaction is successfully completed, it will help SK Hynix expand its global business network and strengthen its storage technology.