South Korea’s SK Hynix said that the company turned in a loss in the fourth quarter as the global chip market slowed amid weak demand and oversupply.
The world’s second-largest memory chip maker recorded an operating loss of 1.7 trillion won in the three months that ended December, compared with an operating profit of 4.2 trillion won in the same period last year. Its net loss was 3.52 trillion won, compared with a net profit of 3.31 trillion won in the same period last year. Sales fell 37.8 percent to 7.69 trillion won in the three-month period.
The loss in the quarter was the largest since SK Group acquired Hynix in 2012.
Most of SK Hynix’s profits come from selling memory chips. But macroeconomic woes have led consumers to tighten spending on electronics that require such semiconductors.
The company said market conditions have deteriorated significantly and that personal computer and smartphone makers, the main buyers of DRAM and NAND flash, have begun to deplete their inventories and cut spending.
In October, SK Hynix said it would cut its investment this year by a little more than half from last year’s estimated upper range of 10-20 trillion won, citing a precipitous drop in demand.
Research firm TrendForce said it expects DRAM prices to fall 13-18 percent and NAND flash memory to drop 10-15 percent in the first quarter as “supplier inventory pressure remains high due to continued weak demand for consumer electronics.
For the full year of 2022, SK Hynix reported a net profit of 2.43 trillion won, down 74.6 percent from the same period a year earlier. Operating income for the year was 7 trillion won, down 43.5 percent year-over-year. Annual sales increased by 3.8% to 44.64 trillion won.