Comprehensive Korean media reports, SK Hynix's foundry subsidiary SK Hynix System IC (SK Hynix System IC) recently announced restructuring and layoffs in response to the dual challenges of fierce market competition and deteriorating business conditions...

While SK Hynix, as the largest supplier of HBM (high bandwidth memory), has achieved a significant turnaround in performance thanks to the growing demand for AI servers, its subsidiary SK Hynix Systems IC is facing different challenges. According to ETNews and Seoul Economic Daily, SK Hynix Systems IC has begun to implement a restructuring plan, including a voluntary retirement policy for elderly employees, which is mainly for foreign production employees and Korean administrative staff.

In this restructuring plan, SK Hynix Systems IC provides voluntary retirement employees with favorable conditions including one year's basic salary, 25 million won (about 123,750 yuan) compensation, and full tuition subsidies for children. This measure aims to reduce the financial burden on the company while providing some financial compensation to the affected employees.

The restructuring of SK Hynix System IC is a direct result of intense competition in the 8-inch foundry market, as well as low-price competition from competitors and a long-term slowdown in market conditions, which have combined to lead to a deterioration in operating conditions. As a subsidiary of SK Hynix, which is mainly engaged in 8-inch wafer foundry business, SK Hynix System IC has production bases in South Korea and Wuxi, China, mainly producing power management ics (PMIC) and display driver ics (DDI).

SK Hynix said that the recovery of the 8-inch wafer foundry market was not as good as expected, coupled with low price competition from competitors, the company's financial situation was seriously affected. In 2023, SK Hynix Systems IC suffered a loss of 31.3 billion won and an operating loss of 17.1 billion won. The market expects that SK Hynix System IC's performance in 2024 will also be difficult to significantly improve.

Faced with a market recovery that was not as expected and low price competition from competitors, SK Hynix System IC's financial situation was seriously affected, and it eventually moved toward restructuring. Its future strategic adjustment and market performance will undoubtedly become the focus of attention in the industry.

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