By Kim Eun-jung
SEOUL, March 22 (Yonhap) -- South Korean memory chip maker SK hynix Inc. will beef up efforts to enhance the semiconductor manufacturing process and cut costs in the face of tougher times ahead, its chief executive said Friday.
SK hynix CEO Lee Seok-hee expected challenges for its memory chip business amid rising uncertainties in the global economy and falling prices of DRAM and NAND flash chips following a two-year "super cycle."
The world's second-largest memory chip maker posted all-time high sales of 40.4 trillion won (US$35.7 billion) in 2018, on the back of strong global demand driven by data servers and high-end smartphones. Its operating and net profits also broke the previous high.
"Following an unprecedented semiconductor boom over the past two years, the business environment is expected to turn unfavorable this year due to rising uncertainties in the global economy and slowing demand for memory chips," Lee said during the annual shareholder meeting held at the company's headquarters in Icheon, about 30 kilometers southeast of Seoul.
"We will make cost-cutting efforts by raising efficiency in the semiconductor fabrication procedures, a key memory chip technology, and raise the yield rate," he said.
Lee said the company will collaborate with local parts makers to build a robust supply chain and expand the infrastructure for the nation's semiconductor industry.
Last month, SK hynix announced a plan to spend $107 billion to build a semiconductor cluster in Yongin, south of Seoul, to maintain its competitive edge in the global market.
Four semiconductor fabrication plants will be built at a site spanning approximately 4.5 million square meters, starting from 2022, which would make it the world's largest semiconductor cluster.
The cluster is part of the government's broader plan to improve the semiconductor industry's competitiveness amid the rapid rise of Chinese manufacturers backed by the Beijing government.
Seoul-Tokyo ties tipped for deeper rift after Japan's expanded export control: experts
Trade row with Japan, another headwind for Korean economy
Japan hides true intentions, leaving export curbs unjustified
Boycott of Japanese goods to intensify as Tokyo expands export curbs
Japan's broader export curbs aim for S. Korea's Achilles heel