On November 4, SK Hynix announced its financial results for the third quarter of 2020 (July-September). According to the report, sales increased 19% year-on-year to 8,128.8 billion won, operating income increased 2.8 times to 1,299.7 billion won, and net income increased 2.2 times to 1,077.9 billion won. SSD remained strong, though not as well as last quarter.

  • SK Hynix

    Summary of SK Hynix financial results for the third quarter of 2020 (Source: SK Hynix)

Bit shipments increase but memory prices fall

In the DRAM business, demand for server DRAM decreased due to increased demand for mobile and graphics DRAM, but quarterly DRAM bit shipments increased by 4% quarter-on-quarter. However, the average selling price of DRAM fell by 7% year-on-year due to the fall in prices of server DRAM and other specific DRAM products.

Regarding NAND, sales of SSDs for both mobile and next-generation game consoles expanded, and bit shipments increased by 9% year-on-year, while average selling prices increased due to falling prices of products for servers. It decreased by 10%.

The company said that there will be a seasonal increase in demand in the mobile market in the fourth quarter, and the PC market is expected to continue to be strong. Regarding DRAM, it will respond to mobile demand by expanding sales of 1Y nm LPDDR5 DRAM. In addition, it plans to increase its presence in the UFS-based multi-chip package (uMCP) market that combines DRAM and high-density NAND. The company also plans to expand its market share by expanding the sales ratio of large-capacity server products of 64GB or more and expanding the sales of HBM. NAND, on the other hand, is trying to increase profitability by increasing the sales ratio of 128-layer 3D NAND products, which began full-scale sales in the third quarter, while responding to demand from mobile devices.

Short-term acquisition of Intel NAND business, long-term strategy of Kioxia investment

Lee Seok-Hee, CEO of SK Hynix, said of Intel’s acquisition of its NAND and storage business, “to quickly secure key SSD technologies and diversify our product portfolio. Intel is particularly competitive in SSDs for data centers, so it can build complementary relationships, which will lay the foundation for the NAND business to triple its current value in five years, and DRAM. We are now able to aim to establish a well-balanced business structure for NAND. “

He added that SK Hynix plans to acquire 14.96% of common stock after the listing of Kioxia Holdings (formerly Toshiba Memory): “Intel is an investment aimed at short-term effects, but Kioxia is an investment from a long-term perspective. There is. ” In addition, the company has stopped shipping memory exports to Huawei, which accounts for more than 10% of sales, due to a notification from the U.S. Department of Commerce from mid-September, and has applied for a new license, but as of November 4, It was revealed that permission had not been obtained from the Ministry of Commerce.

In addition, he said, “We aim to cover all power consumption with renewable energy by 2050. General-purpose SSDs and low power consumption SSDs have low power consumption performance of 50% and 94%, respectively, compared to HDD. If all HDDs in the global data center can be replaced with low power consumption SSDs, it will be possible to reduce carbon dioxide emissions by 41 million tons, “he said, showing his willingness to create social value through ESG. Was there.