SK hynix sees memory chip rebound in second half after record loss

South Korea’s SK Hynix Inc said production cuts by memory chipmakers will improve market conditions from the second half of 2023, after it reported a record quarterly operating loss on Wednesday.

The firm’s loss widened as a global economic slowdown worsened a memory chip glut during the first quarter, prompting sluggish demand and falling prices, SK Hynix said.

However, “we expect revenue to rebound in the second quarter after bottoming out in the first, driven by a gradual increase in sales volume,” SK Hynix said.

Earlier this month, compatriot Samsung Electronics Co Ltd, the world’s largest memory chipmaker, made a rare production cut announcement as a sharp global downturn in semiconductor demand sent prices plummeting.

Such cuts will reduce inventory across the industry and improve market conditions from the current quarter, SK Hynix said.

The world’s second-biggest memory chipmaker reported a 3.4 trillion won ($2.54 billion) operating loss in the January-March quarter, versus a 2.9 trillion won profit a year earlier.

The result matched the 3.4 trillion won operating loss Refinitiv SmartEstimate based on the forecasts of 29 analysts and weighted toward those who are more consistently accurate.

The loss is the biggest since SK Group acquired Hynix in 2012, and is the second in a row after the fourth quarter’s 1.9 trillion won loss.

Revenue fell 58% on year to 5.1 trillion won.

SK Hynix shares traded up 2.1% versus a 0.2% decline in the wider market, after the firm flagged a market rebound. Reuters