SK hynix’s 2020 operating profit jumps 84% on-year

(SK hynix)

SK hynix, the world’s second-biggest memory provider, reported Friday an 84 percent on-year growth in its annual operating profit in 2020.

The chipmaker posted 31.9 trillion won ($28.6 billion) in revenue and 5.01 trillion won in operating profit in 2020, up 18 percent and 85 percent from a year earlier, respectively.

Its net income of 2020 stood at 4.76 trillion won, while the operating margin was 16 percent, and net margin was 15 percent.

“Due to the global pandemic and the intensifying trade disputes last year, the memory market showed sluggish trend,” said Noh Jong-won, executive vice president at SK hynix.

“In the meantime, the company stably mass-produced its main products such as 1Znm DRAM and 128-layer NAND Flash,” Noh also explained, referring to the third generation of 10-nm DRAM.

In the final quarter of 2020, SK hynix posted 7.97 trillion won in revenue and 966 billion won in operating profit with an operating margin of 12 percent.

The fourth-quarter revenue and operating profit declined from the previous quarter due to falls in memory prices and the weak US dollar.

However, the company achieved an operating profit of 298 percent due to strong mobile demand, it said.

For this year’s DRAM market, SK hynix estimates that demand for server products would increase due to investment of new data centers by global companies. 5G smartphones shipments are also expected to remain high.

For the NAND Flash market, the company expects that the market trend will recover from the second half of this year, as high inventory levels across the eco-system are resolved during the first half, along with the increased adoption of high-capacity products for mobile devices and the strong demand for SSDs.

“As the high-performance computing and artificial intelligence system markets grow, the proportion of high-value-added DRAM products such as HBM2E will be increased,” the chipmaker said. “This year, SK hynix plans to actively respond to this demand and strengthen its technology leadership while increasing the proportion of strategic products revenue.”

The company also plans to diversify NAND Flash products, such as pursuing customer certification for 128-layer SSDs for servers.

By Song Su-hyun (song@heraldcorp.com)