SK Hynix recorded a significant drop in its operating income for the third quarter stemming from the low memory demand caused by the global economic downturn.
The memory chipmaker said it recorded 11 trillion won in sales and 1.65 trillion won in operating income during the third quarter, a drop of 7% and 60%, respectively, from a year prior.
Its customers saw reduced shipment during the quarter which caused them to purchase fewer memory chips than expected, SK Hynix said.
In response, the company is planning to reduce its CAPEX by over 50% than it planned to do so prior to the poor earnings.
This oversupply of memory chips is expected to continue sometimes, SK Hynix noted, and it will reduce producing low-end chips and instead focus on high-end products.
The company is planning to commercialize its 238-layer NAND flash next year.
Its latest 10-nanometer (nm) DRAM is also expected to launch next year.
While demand from PC and mobile is expected to continue to be weak, SK Hynix said the server sector will continue to grow from large customers scaling their data centers to meet trends such as AI and metaverse.