SK Hynix may not slash chipmaking investment in 2023: vice chairman

SK Hynix Inc., the world’s second-largest memory chipmaker, will not significantly cut its semiconductor output this year, Vice Chairman Park Jung-ho said at a press conference in Seoul on Feb. 15.

He hinted that there could be a change in the chipmaker’s plan to spend less than half its 2022 investment of 19 trillion won ($14.8 billion) in 2023, which was announced last October. 

The tech giant reiterated the original plan early this month, posting its first quarterly operating loss in a decade.   

“You may consider reducing production to deal with oversupply, but a large slash in output is not good for competitiveness. We are creating various strategies to improve the management of supply and demand,” Park said on Wednesday. 

As its inventories have soared in the economic downturn, SK Hynix has cut the use of silicon wafers since end-2022 to reduce the output of low-profit products.

Despite the gloomy outlook for this year, Park said there are still opportunities in semiconductors thanks to the boom of ChatGPT, the chatbot developed by Microsoft Corp.-backed OpenAI based on generative artificial intelligence technology.

“The chatbot will generate huge demand for chips as data production, storage and processing are exponentially increasing worldwide,” the vice chairman said.

The chipmaker, alongside Samsung Electronics Co., is enjoying surging orders for high bandwidth memory (HBM) DRAM, which substantially increase data processing speed compared with existing models, by connecting several DRAMs vertically.

SK Hynix has supplied its third-generation HBM DRAM to Nvidia Corp. for the graphics chipmaker’s A100 GPU used for ChatGPT, according to industry sources on Feb. 13. 

Park added that SK Hynix is cooperating with the US to ease regulations on the CHIPs and Science Act, which includes the US’ strict guardrails for firms considering expanding into China.

Under the law, semiconductor makers that want to take US subsidies and tax credits can’t execute new investments in “countries of concern” for at least a decade to produce chips with 28-nanometer circuits or smaller.

SK Hynix will also quickly decide whether to build fabless manufacturing facilities with members of the Chip 4 alliance, a semiconductor partnership of the US, Korea, Japan and Taiwan. 

Write to Ji-Eun Jeong at jeong@hankyung.com

Jihyun Kim edited this article.