SK Hynix forecast demand from the mobile sector to recover in the second half of 2023 with China’s economy rebounding and a rise in new product launches, after registering a net loss in Q1 due to sluggish memory sales and falling prices.

CFO Kim Woohyun noted in its earnings release the memory market remained tough but showed signs of bottoming out.

SK Hynix expects “the market will soon find a balance” the CFO stated.

The South Korea-based company expects market conditions to improve in the second half after hitting a low in Q1, driven by a gradual increase in sales volume.

Inventory across the memory industry is forecast to drop from Q2 as production cuts by suppliers take effect.

SK Hynix also expects the growing high-performance server market for AI applications and wider adoption of high-capacity memory products to have a positive impact on the market.

It booked a net loss of KRW2.6 trillion ($1.9 billion) compared with a KRW2 trillion profit in Q1 2022.

Revenue dropped 58 per cent to KRW5.1 trillion.

SK Hynix plans to actively shift its product mix to respond to customer demand. After previously halving 2023 capex, it is minimising investment in “every aspect, excluding essential investments to maintain competitiveness”.

Earlier in the month, rival Samsung predicted Q1 operating profit will drop 96 per cent to KRW600 billion and revealed plans to cut production of memory chips.