SK Hynix logs Q3 losses; to ship LPDDR5T to Qualcomm

SK Hynix Inc., the world’s No. 2 memory chipmaker, on Thursday reported its fourth straight quarterly loss, but narrowed the shortfall thanks to a turnaround in the DRAM division as the artificial intelligence market boom sparked demand for high-performance chips with high bandwidth memory (HBM).

The South Korean company believes its earnings bottomed out in the first quarter of this year. DRAMs are in short supply in the current quarter on the back of an industrywide chip output cut and its customers' reduced inventories.

It posted an operating loss of 1.8 trillion won ($1.3 billion) in the July-September period of this year on a consolidated basis. That's 38% lower than the second quarter’s loss of 2.88 trillion won.

Its second-quarter revenue climbed 24% to 9.1 trillion won on-quarter, but declined 17.5% on-year.

HBM3, the fourth-generation memory, and other types of high-capacity chips such as DDR5 and mobile DRAMs, drove shipments of SK Hynix's memory chips about 20% higher on-quarter.

Their average selling price gained about 10% during the period.

“More than anything, it is meaningful that our DRAM sales, which posted losses in the first quarter of this year, swung to a profit in two quarters,” said Kim Woo-hyun, chief financial officer of SK Hynix, on a conference call.

RAPID GROWTH IN HBM DEMAND

SK Hynix forecasts HBM sales to soar by an average of 60-80% per year over the next five years in line with rapid improvement in generative AI capabilities.

On the other hand, it offered a cautious outlook on NAND Flash, which has seen losses to the tune of billions of dollars, due to still high-level inventories, despite shipment growth for mobile chips and solid-state drives (SSDs).

SK Hynix will continue to invest in production facility expansion with a focus on high-end memories such as HBM, DDR5 and LPDDR5, while slashing the output of legacy chips such as DDR4.

Overall, its overall capital expenditures will rise next year compared with this year. But that won't lead to production capacity expansion.

QUALCOMM SNAPDRAGON 8 GEN 3

Separately, SK Hynix said it has verified the compatibility of SK Hynix's 9.6Gbps LPDDR5T (low power double data rate 5 turbo), the industry’s fastest mobile DRAM chip, with Qualcomm’s Snapdragon 8 Gen 3, or its new flagship mobile platform that supports generative AI chatbots.

That marked the industry’s first case for such a product to be verified by a US company, meaning LPDDR5T will be mounted on Qualcomm's next-generation mobile application processor, Snapdragon 8 Gen 3.

The newest chip operates 13% faster than its previous generation unveiled in November 2022, processing data at a rate of 9.6 gigabits per second (Gbps).

The first phones equipped with Qualcomm’s Snapdragon 8 Gen 3 chipset are reported to debut in the coming weeks.

Based on the latest LPDDR5T, SK Hynix will roll out products with a 16-gigabyte (GB) capacity, a combination of multiple single LPDDR5T chips, which process data at a speed of 77GB per second. That is equivalent to processing 15 Full HD movies within a second

“Our collaboration with SK Hynix pairs the fastest mobile memory with our latest Snapdragon mobile platform and delivers amazing on-device, ultra-personalized AI experiences such as AI virtual assistants for smartphone users,” Ziad Asghar, senior vice president of product management at Qualcomm Technologies, said in a statement released by SK Hynix.

(Correction: SK Hynix's newest memory chip 9.6Gbps LPDDR5T has not yet been commercialized.)

Write to Ye-Rin Choi at rambutan@hankyung.com
 


Yeonhee Kim edited this article.