SK Hynix CEO Nojung Kwak: "Volatility Will Increase in Second Half Due to Tariffs... Let's Work Together to Achieve Our Goals"

Employee Communication Event Held at Icheon Campus
"Predictions Are Difficult, but So Far We Are On Track"
Confident in DRAM Competitiveness Following HBM
TC Bonder Diversification Strategy to Continue
New Standards Needed for PS Incentive System: "We Must Do It Right"

Nojung Kwak, President and CEO of SK Hynix, predicted that volatility will increase in the second half of this year due to the impact of tariffs and ongoing uncertainties. He urged employees, "Let's all work together to achieve our goals."

Nojung Kwak President and CEO of SK Hynix

According to industry sources on June 11, Kwak held the 'Together THE Communication Event' at the SK Hynix Icheon Campus the previous day, where he addressed employees about the 'future performance outlook.' He stated, "It is difficult to predict this year and next year, but so far, we are moving in line with our plans."

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

Industry experts believe that, as the United States is implementing comprehensive tariff policies, and if item-specific tariffs on semiconductors become a reality, SK Hynix could also be affected. Kwak highlighted this point, emphasizing the need for the company to prepare for such variables.

However, there are also internal expectations that the semiconductor market conditions this year will be positive. Sangrak Lee, Executive Vice President in charge of Global Sales Marketing (GSM), said, "The market conditions in the first half were very good, and the outlook for the second half is not pessimistic." He added, "Our competitive edge lies in high-bandwidth memory (HBM), and our conventional DRAM also remains competitive."

SK Hynix is currently supplying the latest HBM3E (5th generation) to Nvidia, a major player in AI, and has already sold out this year's volume. The next-generation product, HBM4 (6th generation), has already been sampled to major customers including Nvidia, and is scheduled for mass production in the second half of this year.

On the strength of its dominance in the HBM market, SK Hynix overtook Samsung Electronics to become the global leader in the DRAM market in the first quarter of this year for the first time in 33 years. According to market research firm Omdia, SK Hynix's DRAM market share in the first quarter was 36.9%.

The company plans to maintain its strategy of diversifying suppliers for the 'TC Bonder,' a key piece of equipment for HBM manufacturing. Youngsik Kim, Executive Vice President in charge of mass production, said, "The company's diversification policy will remain unchanged going forward," and explained, "Although we have worked with our original supplier for a long time, we have also worked with other diversified suppliers for a long period, which is why we split the orders in May this year."

Until now, SK Hynix had used Hanmi Semiconductor's TC Bonder equipment exclusively for HBM3E 12-layer manufacturing, but at the beginning of this year, the company decided to also use equipment from Hanwha Semitek, which led to tensions with Hanmi Semiconductor. At the time, Hanmi Semiconductor claimed that it had provided customer service (CS) free of charge and supplied equipment at lower prices than competitors, and reportedly demanded that SK Hynix pay for services and accept higher equipment prices. In response, Executive Vice President Kim refuted, "There was no free provision of services, and it is not necessarily true that we bought competitors' products at higher prices. We simply followed our own policies regarding pricing and other matters."

Additionally, President Kwak addressed the development of new standards for the excess profit-sharing (PS) incentive system, saying, "There are many comments that the rules are ambiguous, so we need to take this opportunity to establish better rules by gathering opinions from all sectors." He added, "If we create a forum for open discussion and share the company's finances, misunderstandings could be reduced."

PS is an incentive paid annually based on company performance, up to 50% of annual salary (1,000% of base salary). Since 2021, SK Hynix has allocated 10% of the previous year's operating profit as the source for PS, linking it to individual performance. The company achieved record operating profit of 23.4673 trillion won last year, and at the beginning of this year paid out PS at 1,500% of base salary and 30 shares of company stock as a bonus. However, conflict arose as the labor union argued that a higher level of special performance bonus should be paid. The union is currently negotiating with management on wage increases and additional PS payments.

This content was produced with the assistance of AI translation services.