SK Hynix expects the semiconductor market to recover in the third quarter and has launched a usd373 million fundraising plan

Source: Xinzhixun

    On May 18th, according to the South Korean Economic Daily, storage chip giant SK Hynix is preparing to launch a fundraising plan of up to 500 billion Korean won (approximately $373 million) to better respond to the subsequent recovery of the semiconductor market.

    According to SK Hynix‘s financial report released on April 26th, in the first quarter of 2023, revenue decreased by 58% annually to 5.09 trillion won, and operating losses expanded from 1.89 trillion won in the fourth quarter of 2022 to 3.4 trillion won (approximately $2.54 billion), marking the most severe loss since SK Group acquired Hynix in 2012.

    In this context, SK Hynix‘s fundraising should be aimed not only to cope with the financial pressure caused by the continuous decline in the storage market, but also to quickly expand investment after the market recovery arrives.

    According to the report, SK Hynix plans to borrow 300 billion won from Hana Bank and 200 billion won from other financial institutions.

    SK Hynix executives stated that the fundraising purpose is to welcome market improvement, and it is expected to see a recovery in the semiconductor market as soon as the third quarter.

    Analysts pointed out that the recovery of the semiconductor market is attributed to the reduction of production by Samsung Electronics, the world‘s largest storage chip manufacturer. In April of this year, Samsung announced a reduction in production of storage chips due to the continuous decline in the global storage chip market and a sharp decline in performance. Although Samsung has not announced the exact reduction in production, analysts at Citigroup expect Samsung DRAM to reduce production by 20% and NAND Flash to reduce production by 15%.

    The latest research report released by Citigroup states that although it still holds a conservative view on the chip industry, there are certain signs that the semiconductor market can be optimistic in the future, including PC sales stabilizing, artificial intelligence (AI) demand soaring, and the gradual recovery of the mobile phone market.