South Korean chipmaker SK Hynix has reported a report quarterly working lack of 3.4 trillion gained ($2.54 billion) for the primary quarter of the 12 months.
According to Reuters, that is its largest loss because the SK Group acquired Hynix in 2012.
This is a reversal from the two.84 trillion gained working revenue in the identical interval final 12 months, and a bigger loss from the the 1.89 trillion gained working loss the earlier quarter. Overall income tumbled 58% year-on-year to five.09 trillion, in response to the corporate’s earnings launch.
Net losses for the primary quarter got here in at 2.59 trillion gained, in comparison with a 1.99 trillion revenue within the first quarter of 2022.
The world’s second-largest reminiscence chipmaker stated working losses widened on account of “sluggish demand and falling product prices” because the reminiscence chip downturn continued by means of the primary quarter.
Employees stand in entrance of the SK Hynix Inc. brand displayed on the firm’s workplace in Seongnam, South Korea, on Monday, July 24, 2017.
SeongJoon Cho | Bloomberg | Getty Images
Still, the corporate is anticipating a rebound within the second half of the 12 months. Shares of SK Hynix have been increased by 1.75% in afternoon commerce after surging as a lot as 3.5% earlier Wednesday. The inventory is up 16% year-to-date.
“Inventory across the memory industry is expected to improve from the second quarter with production cut by suppliers taking into effect,” SK Hynix’s earnings launch stated.
“The growing high-performance server market for artificial intelligence including ChatGPT and a wider adoption of high-capacity memory products by customers” may also give the market a lift, the corporate stated.
The outlook will possible enhance from the subsequent quarter, one analyst stated.
James Lim, senior analysis analyst at Dalton Investments, informed “Squawk Box Asia” the chip business has “passed the bottom” and is “slowly grinding toward a recovery.”
“We expect revenues to rebound in the second quarter after bottoming out in the first, driven by a gradual increase in sales volume,” SK Hynix additionally stated.
Sanjeev Rana, head of analysis for South Korea at CLSA, stated he nonetheless expects additional draw back to SK Hynix’s earnings within the second quarter.
Despite the anticipated provide cuts, reminiscence chip costs within the second quarter might nonetheless fall between 10% to twenty%, placing stress on common promoting costs and in flip, earnings for the corporate, he informed CNBC’s “Street Signs Asia” on Wednesday.
However, Rana stated clients will begin a listing stocking cycle from the second half of this 12 months. This, mixed with the manufacturing cuts, will see a “sequential recovery” in earnings for SK Hynix as “demand and supply become more balanced in the second half and beyond.”
Rival Samsung Electronics is because of report first quarter earnings on Thursday. The chip big issued steerage earlier this month saying working revenue for the primary quarter will possible are available at 600 billion Korean gained ($449 million). If the steerage is correct, it might be the corporate’s lowest revenue because the first quarter of 2009.
In early April, Samsung Electronics stated it might make a “meaningful” minimize to chip manufacturing, following related strikes by SK Hynix and Micron.
Lim stated the provision cuts by Samsung are “going to give [a] breather to SK Hynix and Micron.”
However, he says that if chipmakers make extra aggressive cuts, the business may attain an “inflection point,” which he stated might not be removed from now.
Source: www.cnbc.com”