• Quarterly revenues of 10.98 trillion won, operating profit of 1.66 trillion won, net profit of 1.1 trillion won
• Sales and profits reduced QoQ due to decreasing demand and price of memory chips
• Will reduce investment in 2023 by more than 50% YoY, while reducing production volume focusing on less profitable products
• While focusing on server DRAMs, SK hynix is prepared to mass-produce the latest products and increase profitability

SEOUL, South Korea, Oct. 26, 2022 /PRNewswire/ -- SK hynix Inc. (or "the company", www.skhynix.com) reported today revenues of 10.98 trillion won, operating profit of 1.66 trillion won (with OP margin of 15%), and net income of 1.1 trillion (with net income margin 10%) in the third quarter of 2022. Sales and operating profits decreased 20.5%, 60.5% respectively QoQ.

* SK hynix reported 13.81 trillion won in revenues, 4.19 trillion won in operating profit, and net income 2.88 trillion won in the second quarter of 2022

SK hynix analyzed that revenues fell QoQ as both sales volume and price decreased due to sluggish demand for DRAM and NAND products amid worsening macroeconomic environment worldwide. In addition, SK hynix explained that despite the company improved cost competitiveness by increasing the sales proportion and yield of the latest 1anm DRAM and 176-layer 4D NAND, operating profit also decreased due to greater price drop than cost reduction.

SK hynix diagnosed that the semiconductor memory industry is facing an unprecedented deterioration in market conditions as uncertainties in the business environment continued. The deterioration occurred as the shipments of PCs and smartphone manufacturers, which are major buyers of memory chips, have decreased.

However, SK hynix anticipated that the demand for memory chips in datacenter servers, while decreasing in the short term, will continue to grow in the mid- to long-term perspective, as hyperscale data centers are continuing their investment to meet the increasing scale of industries such as artificial intelligence (AI), big data and metaverse. SK hynix emphasized that as it is leading the latest DRAM technologies such as high bandwidth products including high bandwidth memory 3 (HBM3) and DDR5/LPDDR5, the company will solidify its position in terms of long-term growth.

In addition, SK hynix stressed that it will expand mass production of industry's first 238-layer 4D NAND next year, which was developed in the third quarter of this year, and by doing so secure cost competitiveness and increase profitability continuously.

Meanwhile, SK hynix predicted that supply will continue to exceed demand for the time being. Given such consideration, the company has decided to reduce its investment next year by more than 50% YoY. The current year's investment is expected to be at the upper range of 10-20 trillion won.

SK hynix also revealed that it plans to gradually reduce production volume focusing on relatively less profitable products. The plan is to normalize the market's supply and demand balance by maintaining such tendency in investment and production reduction for a certain period of time.

"We will leap forward as a leading semiconductor memory player by overcoming this downturn based on our potential that has always turned crises into opportunities in the past," said Kevin (Jongwon) Noh, chief marketing officer (CMO) at SK hynix.

■ 3Q22 Financial Results (K-IFRS)       

^{*The financial information of the earnings is written based on K-IFRS.}

Please note that the financial results discussed herein are preliminary and speak only as of September 30, 2022. Readers should not assume that this information remains operative at a later time. In addition, this information may include forward-looking statements that involve a variety of risks and uncertainties that could cause actual results to differ materially. For further discussion of these risks and uncertainties, readers should refer to SK hynix Inc.'s filings with the Korea Exchange. This document is neither an offer to sell nor a solicitation of an offer to sell any security of SK hynix Inc.

About SK hynix Inc.
SK hynix Inc., headquartered in Korea, is the world's top tier semiconductor supplier offering Dynamic Random Access Memory chips ("DRAM"), flash memory chips ("NAND flash") and CMOS Image Sensors ("CIS") for a wide range of distinguished customers globally. The Company's shares are traded on the Korea Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about SK hynix is available at www.skhynix.com, news.skhynix.com

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