SK Hynix System IC, a foundry subsidiary of SK Hynix, recently announced restructuring and layoffs to cope with the dual challenges of fierce market competition and deteriorating operating conditions...
Although SK Hynix, as the largest supplier of HBM (high-bandwidth memory), has achieved a significant reversal in performance thanks to the increase in demand for AI servers, its subsidiary SK Hynix System IC faces different challenges. According to reports from ETNews and Seoul Economic Daily, SK Hynix System IC has begun to implement a reorganization plan, including a voluntary retirement policy for older employees. This policy mainly targets foreign production employees and Korean administrative staff. SK Hynix System IC is Employees who voluntarily retire are provided with compensation including one year's basic salary and 25 million won (approximately 17k USD).
The restructuring of SK Hynix System IC is directly caused by the fierce competition in the 8-inch wafer foundry market, as well as the low-price competition of competitors and the long-term slowdown in market conditions. These factors have jointly led to the deterioration of operating conditions. As a subsidiary of SK Hynix that specializes in 8-inch wafer foundry business, SK Hynix System IC has production bases in South Korea and Wuxi, China, and mainly produces power management IC (PMIC) and display driver IC (DDI) and other products.
SK Hynix said that the recovery of the 8-inch wafer foundry market was not as expected, and coupled with low-price competition from competitors, the company's financial situation has been severely affected. In 2023, SK Hynix System IC's losses reached 31.3 billion won, and its operating losses reached 17.1 billion won. Market expectations are that SK Hynix System IC's performance in 2024 will be difficult to significantly improve.
Faced with a slower-than-expected market recovery and low-price competition from competitors, SK Hynix System IC's financial situation was severely affected, and it eventually went through restructuring. Its future strategic adjustments and market performance will undoubtedly become the focus of the industry.