Gwak No-jeong, President of SK Hynix, "Memory Demand Remains Strong Until Early Next Year"

CEO Communication Event at Icheon Campus
Preparing for Smooth Expansion of HBM Production

Kwack No-jeong, CEO of SK Hynix, stated, "Memory demand is expected to remain solid until early next year, and after that, we will need to monitor the situation."

On the morning of the 7th, Kwack held the 'Together THE Communication Event' at SK Hynix's Icheon campus in Gyeonggi Province and shared this with employees.

SK Hynix holds communication events every quarter where the CEO directly listens to employees and explains various management issues. This communication event was broadcast live to all domestic SK Hynix business sites.

Kwak No-jeong, President and CEO of SK Hynix, held a press conference on the theme of "SK Hynix Vision and Strategy in the AI Era" at the SK Hynix headquarters in Icheon-si, Gyeonggi-do, last May. Photo by SK Hynix. Image source: Yonhap News.

SK Hynix views memory demand driven by the expansion of the artificial intelligence (AI) market as still large next year and plans to actively respond accordingly.

In particular, the company intends to tighten its grip on maintaining leadership in high-bandwidth memory (HBM). The roadmap is already in place. SK Hynix has been virtually the exclusive supplier of the 4th generation HBM, HBM3, to Nvidia, a major player in the AI semiconductor market. In March, SK Hynix became the first memory company to deliver the 5th generation HBM, the 8-stack HBM3E, to Nvidia. The follow-up product, the 12-stack HBM3E, has already been sample-supplied to key customers, and mass production started this quarter, with customer supply beginning in the 4th quarter. The 6th generation HBM4 is expected to start shipping 12-stack products in the second half of next year.

Additionally, SK Hynix's management stated, "We will prepare thoroughly and smoothly for the construction of the packaging plant in Indiana, USA."

Earlier, in April, SK Hynix announced plans to invest $3.87 billion (approximately 5.2 trillion KRW) to build an advanced packaging production base for AI memory in West Lafayette, Indiana, and to collaborate on semiconductor research and development with local research institutions such as Purdue University. In relation to this, the U.S. Department of Commerce announced the day before that it would provide direct subsidies of up to 620 billion KRW for SK Hynix's semiconductor packaging production base investment in Indiana.

Furthermore, regarding the strong performance in the second quarter of this year, Kwack praised the efforts of the employees, saying, "We have achieved a remarkable feat of quarterly operating profit exceeding 5 trillion KRW again since the largest super cycle in memory history in 2018." SK Hynix recorded sales of 16.4233 trillion KRW and operating profit of 5.4685 trillion KRW in the second quarter of this year. This is the third-highest quarterly operating profit since the semiconductor boom in 2018. In the second and third quarters of 2018, operating profits were 5.5739 trillion KRW and 6.4724 trillion KRW, respectively.

At the same time, the management emphasized that SK Hynix holds the "No. 1 operating profit margin in the memory industry." SK Hynix's operating profit margin in the second quarter was 33%, up 10 percentage points from 23.2% in the first quarter. Samsung Electronics' Device Solutions (DS) division, responsible for semiconductor business, posted an operating profit margin of 22.6% in the second quarter. In the first half of the year, excluding Solidigm, SK Hynix achieved an operating profit margin of over 30% and paid 150% of the monthly base salary as the 'Productivity Incentive' (PI) for the first half of this year.