SK Hynix expects demand for memory chips will be weak in the second half of 2020 as it predicts an inventory readjustment period, the company said on Thursday.
After the market hits bottom, it will recover substantially by the first half of 2021, the South Korean memory maker said its its conference call for the second quarter. Smartphones, servers and game consoles will lead this growth, they said.
DRAM bit growth will be 20% higher next year, said SK Hynix’s DRAM marketer Park Myung-soo, with expansion of 5G smartphones offsetting the total shipment decline for smartphones by requiring higher capacities.
The company’s outlook for NAND Flash also remained positive for 2021. Like DRAM, and backed by demand from smartphone, servers and game consoles, the NAND Flash shipment will grow by 20% to 30%.
The company will be conservative in CAPEX throughout this year __ it may decrease it, depending on market situation, SK Hynix said. Next year’s CAPEX will only increase slightly as well, company CFO Cha Jin-seok said.
SK Hynix last year spend 12.7 trillion won in facilities investment. The company is expected to spend less than 10 trillion won this year, according to South Korean analysts. It will be somewhere between 7 trillion won to 9 trillion won. Next year’s investments will also not likely exceed 10 trillion won.
DRAM shipment in the third quarter will remain similar to the second quarter, the company said, while NAND Flash shipment will rise single digits. Its total annual shipment projection will be similar to the one it made before the COVID-19 pandemic. DRAM will grow by mid-10% to late-10%. NAND Flash will grow by mid-40%.
The company will expand the sales of the 2nd generation (1y) 10-nanometer DRAM. It will supply LPDDR5 at the right moment for clients. It will expand sales of sever products with capacity of 64GB or higher. It will begin 3rd generation (1z) mobile DRAM production within the year.
SK Hynix posted 1.9467 trillion won in operating profits and sales of 8.6065 trillion won in the second quarter, a rise of 205.3% and 143.2%, respectively, from a year prior.