Amid concerns growing over slowing demand for memory chips, SK hynix CEO Lee Seok-hee said Friday he would focus on strengthening the chipmaker’s fundamental competitiveness and improving the chip yield rate to cut production costs.

“After an unprecedented boom for the past two years, we are expecting to face growing uncertainties in the global economy and slowing demand for memory chips,” the CEO told reporters after an annual shareholders meeting held at its headquarter in Icheon, Gyeonggi Province. “(Amid deteriorating market environment) the company will focus on strengthening the fundamentals by raising yields rates of nanotechnology and cost-cutting.” 

The CEO of the world’s second-largest memory provider also viewed that supply and demand would strike a balance in the second half of the year.

The remarks came after a series of gloomy earnings forecasts published for SK hynix’s first-quarter performance.

The market consensus on the chipmaking arm under SK Group stood at 2.09 trillion won ($1.85 billion), plunging 52 percent from the same period last year.

Despite market concern, the world’s second-largest memory provider will also bet its future on its project worth 120 trillion won, planned in Yongin, Gyeonggi Province, the CEO said.

The company plans to build four fabrication lines for semiconductors and start operations in 2022. It is waiting for the municipal office’s approval for granting 4.48 million square meters of land for the chipmaker’s semiconductor cluster.

“We are desperate to secure the land in Yongin for the future of the company in the next 20 years,” Lee said. “The land that will be a base for technologies is a must for a manufacturer whose fundamental competitiveness comes from technological prowess.”

At the 71st general meeting of shareholders, Oh Jong-hoon, executive vice president of global sales and marketing, was appointed an internal director of the board. Shareholders also approved the company’s recommendation of having Ha Yung-ku, former chairman of the Korea Federation of Banks, as an outside director.

Meanwhile, shareholders also approved a plan to grant CEO Lee 179,763 shares in stock options.

By Song Su-hyun (song@heraldcorp.com)