Sk Hynix plans to reduce its capital expenditure in 2023 to nearly $12.2 billion and reconsider its expansion plan

Source: techweb

    On July 15, according to Reuters, sources revealed that SK Hynix, the world‘s second-largest memory chip manufacturer, is considering cutting capital expenditure by about 25% in 2023 due to lower than expected demand for end products.

    According to foreign media reports, SK Hynix is considering reducing its capital expenditure in 2023 to 16 trillion won, or about US $12.2 billion.

    Sources revealed that SK Hynix is promoting their NAND flash memory and DRAM capacity expansion plan, and will invest about KRW 21 trillion this year, but the uncertainty of market demand decline continues to rise, forcing them to reconsider their plans for next year.

    Sources also revealed that concerns about the decline in chip demand covered many fields, from smartphones to servers, which exceeded SK Hynix‘s expectations.

    However, foreign media also mentioned in the report that SK Hynix‘s capital expenditure reduction in 2023 is only a source‘s disclosure. SK Hynix has not made a final decision on the capacity expansion plan, so there are still variables in whether their capital expenditure will be reduced next year.

    In terms of the decline in demand for memory chips, the data of research institutions shows that DRAM sales have fallen for two consecutive quarters after hitting a new high of $26.24 billion in the third quarter of last year, and fell to $24.25 billion in the first quarter of this year. As the second largest supplier, SK Hynix‘s sales fell to US $6.56 billion in the first quarter, a decrease of US $870 million compared with the previous quarter, and its market share fell from 30.1% to 27.1%.

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