SK hynix Inc. Reports Second Quarter 2016 Results

Seoul, July 26, 2016

SK hynix Inc. (or ‘the Company’, www.skhynix.com) today announced financial results for its second quarter ended June 30, 2016.

The Company’s consolidated second quarter revenue amounted to 3.94 trillion won rising 8% from the first quarter thanks to increased product shipments beyond expectation, courtesy of memory demand recovery. While operating profit was 453 billion won declining 19% due to a continuous drop in average selling prices compared to the previous quarter.

Net income for the quarter was 286 billion won after a loss in foreign exchange due to a drop in average exchange rates, income tax expenses, and so on. Operating margin was 11% and net margin was 7%.

Quarter over quarter, DRAM bit shipments increased by 18% owing to strong demand from the mobile sector and demand recovery in the computing segment but the average selling price declined by 11%. For NAND Flash, the bit shipments sharply rose by 52% due to increased demand from the mobile and SSD markets as well as a base effect of the first quarter. However, the average selling price decreased by 11% on account of price reduction in NAND solution devices and an increment in the sales portion of TLC products whose unit prices are relatively low.

SK hynix will expand 2Znm DRAM to respond to the market demand in the latter half. The 2Znm has been not only expanded in the Company’s computing DRAM production but also applied to the mobile DRAM and the usage rate of which in DDR4 and LPDDR4 will be gradually increased. As a result, the portion of 2Znm production is expected to be up to 40% of the total DRAM around the end of the year.

For NAND Flash, SK hynix is planning to expand its proportion of 1Ynm process in planar NAND and 36-layer 3D NAND which has been started to ship to the mobile segment. The Company will start to ship 48-layer 3D NAND Flash after completing the development within the latter half of this year.

Please note that the financial results discussed herein are preliminary and speak only as of June 30, 2016. Readers should not assume that this information remains operative at a later time. In addition, this information may include forward-looking statements that involve a variety of risks and uncertainties that could cause actual results to differ materially. For further discussion of these risks and uncertainties, readers should refer to SK hynix Inc.’s filings with the Korea Exchange. This document is neither an offer to sell nor a solicitation of an offer to sell any security of SK hynix Inc.

About SK hynix Inc.

SK hynix Inc., headquartered in Korea, is the world’s top tier semiconductor supplier offering Dynamic Random Access Memory chips (“DRAM”), Flash memory chips (“NAND Flash”) and CMOS Image Sensors (“CIS”) for a wide range of distinguished customers globally. The Company’s shares are traded on the Korea Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about SK hynix is available at www.skhynix.com.