SK Hynix Reports Decline in Social Value Performance Last Year... "Will Actively Promote Energy Saving"

SK Hynix 2019 Social Value Performance

[Asia Economy Reporter Ki-min Lee] SK Hynix's social value (SV, Social Value) performance last year has significantly decreased compared to 2018.

On the 4th, SK Hynix announced its social value performance for the previous year. By sector, it recorded ▲ 'Economic Indirect Contribution Performance' of 4.0593 trillion KRW including tax payments, employment, and dividends ▲ 'Business Social Performance' of -539.8 billion KRW arising from social (labor and win-win growth) and environmental areas during product development, production, and sales ▲ 'Social Contribution Social Performance' of 69.3 billion KRW for local communities.

Compared to 2018, economic indirect contribution performance decreased by 60% (5.9953 trillion KRW), social contribution social performance decreased by 8% (6.4 billion KRW), and business social performance's negative impact increased by 5% (27.5 billion KRW), showing a significant decline in all areas.

The economic indirect contribution performance decreased the most due to a 92% reduction in tax payments compared to the previous year caused by the semiconductor market downturn. However, employment increased by 3,186 people (11%) compared to 2018, with the total domestic workforce (including subsidiaries) reaching 31,508 at the end of last year.

Due to factory expansions and increased production volume, resource usage such as electricity increased, leading to an overall increase in negative impacts in business social performance. In particular, the total environmental performance recorded a negative impact of -817.7 billion KRW, a 15% increase compared to 2018. On the other hand, in the win-win growth sector, performance increased by 36% compared to the previous year to 167.1 billion KRW through semiconductor education and recruitment support programs for partners and the payment of special production incentives of 28.9 billion KRW to subcontractors.

SK Hynix plans to reduce electricity usage, which has the most negative environmental impact, by developing AI-based energy-saving solutions and actively promoting the use of renewable energy across all business sites, including overseas locations. The company will also accelerate the development of low-power semiconductor products.

In particular, SK Hynix explained that to accelerate social value creation, it has selected three core strategies: ▲ minimizing environmental impact for sustainable growth ▲ strengthening win-win growth between large and small-medium enterprises by securing excellent talent in the semiconductor ecosystem ▲ building a social safety net. Since semiconductor production consumes large amounts of energy and water, the company will focus on solving environmental issues such as reducing greenhouse gas emissions, protecting water resources, and recycling waste, while expanding semiconductor ecosystem activation programs to enhance the competitiveness of partner companies.

Furthermore, SK Hynix plans to continuously develop social safety nets that support the safety and survival of the public in preparation for infectious diseases such as COVID-19.

Yun-wook Kim, Head of Sustainable Management at SK Hynix, said, “Social performance has significantly decreased compared to 2018,” adding, “We will actively promote energy saving and low-power semiconductor development, especially in the environmental sector where negative impacts are increasing.”