SK hynix Reveals Financial Performance for Fourth Quarter of 2024

SK hynix Inc. achieves record-breaking financial performance in 2023, driven by sustained demand for AI memory and HBM technology, with plans for continued growth and increased dividends.

Record-breaking yearly performance with impressive revenues, operating profit, and net profit
Strong fourth quarter surge with significant increases in revenues, operating profit, and net profit
Well-positioned for continued growth in the high-performance, high-quality market, particularly in AI memory

SK hynix Hits Record Highs in 2023

Today, SK hynix Inc. made waves in the tech world by announcing its best-ever yearly performance. The numbers are impressive: 66.193 trillion won in revenues, 23.467 trillion won in operating profit (that’s a solid operating margin of 35%), and a net profit of 19.797 trillion won with a net margin of 30%. Just let that sink in for a moment—these figures not only represent a record-breaking year but also surpass last year’s performance by over 21 trillion won, and they even outshine the peak during the semiconductor boom in 2018.

Fourth Quarter Surge

The fourth quarter was especially bright for SK hynix, with revenues climbing by 12% to 19.767 trillion won. Operating profit jumped 15% to 8.083 trillion won, boasting an impressive operating margin of 41%. Net profit also soared to 8.007 trillion won, maintaining that same 41% margin. What’s driving this success? The company attributes its record-breaking results to the sustained demand for AI memory and its world-leading High Bandwidth Memory (HBM) technology.

A Bright Future for AI Memory

SK hynix is riding the wave of AI memory demand, with HBM accounting for over 40% of total DRAM revenue in the fourth quarter. The company’s profitability-oriented strategy, coupled with remarkable product competitiveness, has established a solid financial foundation. Looking ahead, SK hynix is optimistic about 2024, expecting to meet customer needs with timely product supply. As the memory sector shifts toward a high-performance, high-quality market, particularly due to the rising demand for AI memory, the company is well-positioned for continued growth.

Financial Health and Future Plans

By the end of 2024, SK hynix anticipates a cash equivalent increase of 5.2 trillion won, reaching a total of 14.2 trillion won. Debt is also expected to drop by 6.8 trillion won to 22.7 trillion won, leading to significant improvements in both the debt and net debt ratios—down to 31% and 12%, respectively. With global tech giants ramping up their investments in AI servers, the demand for HBM and high-density server DRAM is set to rise.

In the consumer market, SK hynix expects a rebound in sales of AI-equipped PCs and smartphones, especially in the second half of the year. To stay ahead, the company plans to expand its HBM3E supply and is already working on developing HBM4 in response to customer needs.

Dividend Increase and Commitment to Growth

In a move that will please shareholders, SK hynix has raised its annual fixed dividend by 25%, now set at 1,500 won per share, up from 1,200 won. The total cash dividend has been boosted to a whopping 1 trillion won annually. Additionally, the company will allocate 5% of its free cash flow to strengthen its financial structure, separate from its dividend policy.

Kim Woohyun, Vice President and Chief Financial Officer at SK hynix, emphasized the company’s commitment to sustainable growth: “With a significantly increased portion of high value-added products, SK hynix has built a fundamental base to achieve sustainable revenues and profits even in times of market correction.” He added that while the company remains focused on profitability, it will adapt its investment strategies to align with market conditions.

In a world where tech trends shift rapidly, SK hynix is proving that it can not only keep pace but also thrive. As they navigate the evolving landscape, it will be exciting to see how they leverage their strengths in AI memory and advanced technologies to continue this upward trajectory.

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Background Information

About SK hynix:

SK Hynix is a important South Korean semiconductor company known for its innovative contributions to the global technology landscape. Specializing in the production of memory solutions, SK Hynix has played a vital role in shaping the semiconductor industry. With a commitment to research and development, they have continuously pushed the boundaries of memory technology, resulting in products that power various devices and applications.

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Technology Explained

HBM3E: HBM3E is the latest generation of high-bandwidth memory (HBM), a type of DRAM that is designed for artificial intelligence (AI) applications. HBM3E offers faster data transfer rates, higher density, and lower power consumption than previous HBM versions. HBM3E is developed by SK Hynix, a South Korean chipmaker, and is expected to enter mass production in 2024. HBM3E can achieve a speed of 1.15 TB/s and a capacity of 64 GB per stack. HBM3E is suitable for AI systems that require large amounts of data processing, such as deep learning, machine learning, and computer vision.