SK Hynix operating profit falls 87% in 2019

The South Korean semiconductor company was hit hard by the downturn in the memory market.

SK Hynix has reported 2.71 trillion won in operating profit for the 2019 full year, a steep decline of 87% from a year prior. The semiconductor company also saw a revenue of 27 trillion won, a drop of 33% from 2018.

Margin rate also dropped to 10% from its record high of 52% last year.

For the fourth quarter, SK Hynix made 236 billion won in operating profit, a drop of 95% and half of the expected 460 billion won from South Korean analysts.

Like its compatriot Samsung Electronics, the semiconductor firm has been hit hard by the downturn in the memory market that started in late 2018. However, SK Hynix has more reliance on DRAM which has been slower to recover than NAND.

SK Hynix said it expects the DRAM market to improve starting in the second half of 2020. It will aim at expanding LPDDR5 which is expected to become mainstream this year. 

"Demand recovery in server DRAM and the expansion of 5G smartphones is expected," a company spokesman said. In NAND, the trend to offer high memory capacity in PCs and solid-state drives for data centers will spur growth, they said.

The company will expand shipment of 96-layer NAND and begin production of 128-layer NAND this year.

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