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SEOUL, Feb. 1 (Yonhap) -- SK hynix Inc. said Wednesday it swung to a deficit in the fourth quarter due to the global chip market's slowdown amid weak demand and oversupply.
The world's second-largest memory chip maker logged an operating loss of 1.7 trillion won (US$1.37 billion) for the three months ending in December, compared with a profit of 4.21 trillion won a year ago.
Its net loss came to 3.52 trillion won, swinging from a profit of 3.31 trillion won a year earlier.
Sales fell 37.8 percent to 7.69 trillion won during the three-month period.
SK hynix makes most of its profits from selling memory chips. But the macroeconomic woes, including the ongoing war between Russia and Ukraine, soaring inflation and rising interest rates, led consumers to tighten their spending on electronics that need such semiconductors.
The company said market conditions have significantly deteriorated, with PCs and smartphone manufacturers, major buyers of DRAM and NAND flash, moved to deplete their inventories and cut back on spending.
In October, SK hynix said it will reduce its investment by slightly more than half this year from last year's volume estimated at the upper range of 10-20 trillion won, citing a precipitous fall in demand.
DRAM prices are projected to drop 13-18 percent and NAND flash by 10-15 percent in the first quarter, research firm TrendForce said, as "Inventory pressure on suppliers remains significant due to the persistently weak demand for consumer electronics."
For all of 2022, SK hynix reported a net profit of 2.43 trillion won, down 74.6 percent from a year earlier.
The operating income for the year was 7 trillion won, down 43.5 percent on-year. Annual sales rose 3.8 percent to 44.64 trillion won.