SK Hynix Reports Fourth Quarter and Fiscal Year 2012 Results

Operating profit was 55 billion won with operating margin of 2%, turning around from the previous quarter’s loss of 24 billion won thanks to process technology migration and increased sales of premium DRAM and NAND solution products.

Net income for the quarter was 164 billion won, increased largely from 2 billion won in the previous quarter. It was positively impacted by net foreign currency effect due to strong South Korean won.

Quarter-over-quarter, DRAM bit shipment increased 28% but the average selling price declined 10%. For NAND Flash, the bit shipment increased 19% and the average selling price also rose 6%.

During the quarter, DRAM bit shipment dramatically increased due to strong demand of the mobile and server products and increased sales of low-price tablets in emerging markets. However, the average selling price of DRAM decreased due to the weak PC demand. Meanwhile, the portion of mobile DRAM products which represented 40% of the DRAM sales helped minimize the impact of a drop in the price of PC DRAM. Also, the yield improvement of 20nm class DRAM contributed to raise the profitability.

For NAND Flash, the bit shipment increased due to release of brand-new smartphones, tablets and growth of smartphone market in China. Also, limited supply by manufacturers and the sales of the solution products which accounted for more than 87% of total NAND Flash units contributed to the profitability.

Consolidated sales of fiscal year 2012 totaled 10.2 trillion won decreased by 2% from 10.4 trillion won of 2011. Operating loss amounted to 227 billion won swung from the operating profit of 369 billion in 2011. Net loss for the year was 159 billion won. In spite of the difficult market situation, the Company continued the annual revenue over 10 trillion won and produced relatively favorable results compared to other manufacturers.

SK Hynix will enhance its technology competitiveness by starting the mass production of 20nm class mobile DRAM and completing the development of 10nm class NAND Flash in the first half as well as completing the development of 3D NAND Flash within the year. Particularly, it will improve its competitiveness by increasing the proportion of mobile products. It includes growth in the portion of mobile DRAM expected to become a main item in unit sales of DRAM this year and eMMC with increasing demand of mobile IT applications.

##IMAGE_2_C##

Please note that the financial results discussed herein are preliminary and speak only as of December 31, 2012. 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.