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South Korean memory chip giant SK Hynix said it achieved record-high revenue in the second quarter despite the impact of Covid-19 lockdowns in China, the war in Ukraine, and global inflation.
The chip maker's revenue for the period reached 13.8 trillion won (US$10.5 billion), up 34 per cent year on year and 14 per cent ahead of the previous quarter, according to financial results released by the company on Wednesday. Net profit grew 45 per cent year on year to 2.88 trillion won.
"It is meaningful to have achieved excellent business performance despite the difficult business environment such as global inflation, prolonged conflicts between Russia and Ukraine, and Covid-19 lockdowns in certain regions of China," the company said in a statement.
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Despite the lockdowns "our supply-chain has remained in normal operation", the company said.
China has become an important market for SK Hynix since it established its 300-millimetre dynamic random-access memory (DRAM) wafer fab in Wuxi, a city in southern Jiangsu province, in 2006. The facility completed a technology upgrade in 2018 to ensure its "long-term competitiveness", according to the company.
However, pressure from Washington reportedly stopped the company from installing cutting edge extreme ultraviolet lithography (EUV) lithography systems in the Wuxi fab last year. The EUV systems, only available from Dutch-based ASML, are essentially banned from export to China.
On Wednesday's earnings call, SK Hynix said it could revise down its capital expenditure plan for 2023 as it saw signs of weakening demand in memory chips for the personal computer, smartphone and server markets.
The company said DRAM prices fell during the second quarter, but prices for NAND flash products rose along with an increase in overall sales volume. Roughly 70 per cent of its total revenue comes from DRAM products, while 23 per cent is from NAND flash products.
DRAM pricing in the current quarter may see a 10 per cent drop from the previous estimate of an 8 per cent decline as demand peaks in the second half of the year, according to a recent note from semiconductor research firm TrendForce.
"Some DRAM suppliers have begun effectively expressing clear intentions to cut prices, especially in the server field, in order to reduce inventory pressure," TrendForce said.