SK hynix Inc. Reports Fiscal Year 2014 and Fourth Quarter Results

Seoul, January 28, 2015

SK hynix Inc. (or ‘the Company’, www.skhynix.com) today announced financial results for its fiscal year 2014 and fourth quarter ended December 31, 2014. The Company set record highs for both yearly and quarterly results.

The Company’s consolidated sales of fiscal year 2014 totaled 17.1 trillion won while operating profit amounted to 5.1 trillion won and net income was 4.2 trillion won. The Company has reported all-time high annual results for two consecutive years. Operating margin for the year was 30% and net margin was 24%.

The Company increased its year-on-year revenue by 21%, the operating profit by 51% and the net income as much as 46%. Stable market environment helped as well as the Company enhanced profitability in its products portfolio and cost competitiveness through process technology migration.

Consolidated fourth quarter revenue was 5.1 trillion won while operating profit amounted to 1.67 trillion won with operating margin of 32%. Net income for the quarter was 1.62 trillion won with net margin of 32%. The operating profit rose 28% quarterly as the Company improved the profitability in DRAM and NAND Flash product groups.

Quarter-over-quarter, DRAM bit shipments increased 18% but the average selling price dropped 3%. The shipments grew as the Company elevated its portion of 2ynm DRAM to high-40% as well as its sales in PC and server DRAMs which drew steady demand.

For NAND Flash, the bit shipments increased 30% but the average selling price dropped 8%. The shipments rose owing to grown demand according to releases of new mobile gadgets and expanded proportion of 1xnm NAND Flash.

SK hynix will mass produce 2znm DRAM within the first half of this year to continue to strengthen the cost competitiveness. Also, the Company is to preemptively respond to DDR4 adoption mainly in server and mobile DRAMs by expanding its DDR4 portion to 50% in those DRAM segments by the end of the year.

For NAND Flash, SK hynix will mass produce TLC products in a full-scale within the first half and increase sales of NAND application solutions to enhance the profitability. Plus, the Company plans to secure its productivity in 3D NAND Flash in the latter half to get ready for upcoming market demand.

FY2014 Earnings

Consolidated BasisUnit : Billion KRW

	2014	2013	YoY
Revenue	17,126	14,156	21%
Operating Profit	5,109	3,380	51%
Operating Profit Margin	30%	24%	6%p
Net Income	4,195	2,873	46%

※ The financial information of the earnings is written based on K-IFRS.

FY2014 Q4 Earnings

Consolidated BasisUnit : Billion KRW

	2014 Q4	2014 Q3	QoQ	2013 Q4	YoY
Revenue	5,148	4,312	19%	3,368	53%
Operating Profit	1,667	1,301	28%	785	112%
Operating Profit Margin	32%	30%	2%p	23%	9%p
Net Income	1,624	1,095	48%	789	106%

※ The financial information of the earnings is written based on K-IFRS.

Please note that the financial results discussed herein are preliminary and speak only as of December 31, 2014. 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.