SK Hynix returns to operating profit, thanks to high demand for AI chips

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SK Hynix
000660,
-2.76%

returned to an operating profit in the final quarter of 2023 on brisk demand for artificial-intelligence chips and other higher-end products.

The South Korea memory-chip maker’s turnaround after posting four straight quarters of operating losses was the latest in signs pointing to a recovery in the global semiconductor industry.

Operating profit for the quarter ended December was 346.03 billion Korean won ($259.5 million), compared with operating loss of KRW1.912 trillion during the same quarter a year earlier, SK Hynix said.

Demand for powerful computing chips used in AI servers and mobile applications increased sharply toward the final quarter, boosting the company’s sales and average selling prices.

However, SK Hynix posted a net loss in the final quarter, and an operating loss and a net loss for 2023, as it has yet to fully exit the industry downturn.

Net loss for the quarter narrowed to KRW1.379 trillion from KRW3.735 trillion a year earlier, while revenue rose 47% to KRW11.306 trillion.

For the full year, revenue fell 27% to KRW32.766 trillion to result in net loss of KRW9.138 trillion and operating loss of KRW7.730 trillion.

For 2024, SK Hynix said it would focus on improving profitability through sales of value-added products while continuing to develop advanced AI and other high-performance chips.

The company said it would minimize its capital-expenditure increase for stable business operations this year.

Analysts mostly expect SK Hynix to remain on track for a recovery on a rebound in demand and prices this year.

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