Lee Seok-hee, President of SK Hynix, "Responding to Climate Change through Memory Semiconductor Technology Development"

30th SK Hynix Shareholders' Meeting Vision Presentation

[Asia Economy Reporter Suyeon Woo] Lee Seok-hee, CEO of SK Hynix, announced a blueprint to respond to climate change and strengthen ESG (Environmental, Social, and Governance) management through the development of memory semiconductor technology.

On the 30th, at the regular shareholders' meeting held at SK Hynix headquarters in Icheon, Gyeonggi Province, CEO Lee presented the company's long-term vision, stating, "SK Hynix aims to align the direction of memory semiconductor technology development with environmental issues and contribute to solving global problems."

According to CEO Lee, if all hard disk drives (HDDs) used in data centers worldwide are replaced with solid-state drives (SSDs), the expected carbon dioxide (CO2) emissions in 2030 could be reduced by approximately 93%. When converted into economic value, this amounts to about 4.27 trillion KRW.

Lee Seok-hee, CEO of SK Hynix

Specifically, CEO Lee announced that SK Hynix will develop new-concept memory products that can bridge the gap between HDD, SSD, DRAM, and CPU products. To support this technological development, the company plans to build research and development (R&D) centers worldwide, covering the United States, China, and Europe, and implement the 'R&D 24' project, which keeps the laboratory lights on 24 hours a day.

He said, "Next-generation memories such as nearline SSD, PC RAM, and HBM memory can significantly reduce carbon emissions compared to existing products. While Hynix has focused on creating economic value so far, we now intend to use this as a starting point for innovation in creating social value."

SK Hynix is accelerating full-scale ESG management, including joining RE100?the commitment to procure 100% of its electricity consumption from renewable energy by 2050?the first semiconductor company to do so. CEO Lee emphasized, "A company that leads ESG management in step with the times will ultimately gain economic benefits as well."

Meanwhile, at the shareholders' briefing, CEO Lee also mentioned the synergy with the Intel NAND business division, which was acquired last year. He explained that SK Hynix's overall operating profit margin has been heavily dependent on the DRAM business margin, but through this acquisition of Intel's NAND business division, the company plans to diversify its portfolio.

CEO Lee stated, "If SK Hynix secures and maintains a solid leading position in the NAND market, where six companies fiercely compete, the profitability of the NAND business can also maintain a stable trend. This acquisition will not only achieve economies of scale but also serve as an opportunity to rapidly expand excellent talent and strengthen cooperation between the two companies."

He particularly expected that the strengths of SK Hynix and Intel's NAND divisions do not overlap, creating a complementary synergy. CEO Lee said, "Hynix has strengths in the mobile NAND market and DRAM-based applied complex products, while Intel is a leader in the enterprise SSD market; each excels in different areas. Together, they will create synergy value that exceeds the sum of both companies."

At the shareholders' meeting, all agenda items, including approval of financial statements and appointment of inside and outside directors, were passed as originally proposed, and a dividend policy of 1,170 KRW per common share was confirmed. Since 2019, SK Hynix has implemented a dividend policy of a fixed dividend of 1,000 KRW per share plus 5% of annual free cash flow. CEO Lee said, "Until 2021, dividends were calculated according to the announced dividend policy, and thereafter, we will review and communicate transparently, considering market conditions, performance volatility, and shareholders' dividend predictability."