SK hynix Inc. (or ‘the Company’, www.skhynix.com) announced its achievements in creating social value (SV) in 2020. Since 2019, major affiliates of SK Group have been quantifying and announcing the SVs created in the previous year in three areas of “achievements in indirect contribution to the economy”, “business achievements in social performance”, and “achievements in social contribution”.

SK hynix’s achievements of SV last year in the three areas are as follows: KRW 5,373.7 billion for “achievements in indirect contribution to the economy” including tax payment, employment, and dividends; KRW -596.9 billion for “business achievements in social performance” including social (labor/shared growth) and environmental fields; and KRW 110.6 billion for “achievements in social contribution” including donation and social contribution activities.

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The achievements in indirect contribution to the economy has increased by 32% (KRW 1,314.3 billion) compared to the previous year as the semiconductor business conditions improved from last year. The business achievements in social performance, however, the negative amount has increased by 11% (KRW 57.1 billion) year on year due to environmental impacts such as greenhouse gas emissions. Meanwhile, the amount of achievements in social contribution has increased by KRW 41.3 billion mainly due to intensive support for overcoming COVID-19.

Looking into each area more specifically, the Company announced that the achievements in indirect contribution to the economy have shown meaningful results in all sectors of tax payment, employment, and dividends. Firstly, the amount achieved in the tax payment sector has significantly increased by 211% compared to the previous year. Also, SK hynix reached the quota employment rate for the disabled (3.1% for private companies with 50 or more employees at all times) in 2020, achieving results in terms of employing the vulnerable. In terms of dividends, the achievement amount has increased by 17% year on year. SK hynix expects that the achievements in indirect contribution to the economy will continue to grow with the clear signs of improvements of the industry conditions this year.

Business achievements in social performance incurred the negative costs of KRW 944.8 billion in the environmental sector, increased by KRW 127.2 billion from 2019. SK hynix explained that this is due to the characteristics of the semiconductor industry, which consumes large amounts of water and electricity and emits greenhouse gases during the manufacturing process. An official from SK hynix said, “As a result of efforts such as recycling resources across the company, the amount of greenhouse gas emissions per unit production has decreased. However, the Company feels regrettable to its stakeholders that total amount of emissions have increased. SK hynix will focus on reducing the total amount of greenhouse gas emissions by making efforts in various fields such as environmental technology development to reduce adverse environmental impacts.”

Nevertheless, SK hynix has shown the increase of 21% year on year by KRW 322.4 billion in social sector and 116% year on year by KRW 25.5 billion in the products/services sector, partially improving the negative result in overall environmental sector. The Company has strengthened support for its partners by operating “the Technology Innovation Company program” and “the analysis and measurement support center” to foster localization of materials, parts, and equipment. Also, the Company has expanded the supply of low-power products including SSDs that drastically reduce carbon dioxide emissions.

SK hynix has recorded a 60% increase year on year by KRW 110.6 billion in achievements in social contribution. Throughout last year, SK hynix continuously strived to contribute to overcoming the COVID-19 crisis. The Company showed its support to medical staff and provided smart devices necessary for remote learning for children from low-income families in order to build a social safety net.

SK hynix plans to concentrate the company-wide capabilities on “SV 2030”, announced in January this year as the company’s mid- to long-term plan for SV creation. Through this, the Company aims to achieve key goals including becoming net zero by 2050, vitalization of the semiconductor ecosystem, establishment of a social safety net, and internalization of a corporate culture based on diversity and inclusion.

In particular, as the first company to join RE100* in the semiconductor memory industry, SK hynix has shown its strong will to actively make improvements in the environmental field through various efforts such as minimizing greenhouse gas emissions, reducing waste, and expanding water resource recycling in the semiconductor manufacturing process. In addition to this, the Company plans to continue its efforts to replace the existing storage device, HDD, with low-power SSD to expand environment-friendly technology.

*RE100: Declaration to cover 100% of the company’s electricity us with renewable energy by 2050

Kim Youn-wook, Vice President for Corporate Sustainability Management of SK hynix said, “SK hynix has been raising the objectivity and reliability in measuring its performance by announcing the company’s social value achievements for three consecutive years. We also will keep seeking ways to contribute to humanity and society by increasing the scale of social value creation while strengthening ESG management at the same time.”

※ Reference: The purpose and future plans of SK’s social value measurement announcement

Since 2019, SK Group measures the social values created in the previous year based on the ‘Double Bottom Line (DBL) Management’ that pursues both economic value (EV) and social value (SV) and publishes the results every year.

Over the past three years, SK has achieved promising results in the products and services areas, such as displaying meaningful social value creation achievements, and expanding employment of socially vulnerable groups. Nevertheless, SK self-evaluated that the innovation of business model (BM) based on social values has not yet ridden the track, and that a breakthrough effort to drastically reduce greenhouse gas emissions is still necessary.

SK, which is implementing a financial story based on ESG, plans to actively connect its social value measurement with its ESG management, by reflecting social value measurement result in management strategies and decision-making of SK’s affiliates. It also plans to increase the reliability of measurement by transparently disclosing the greenhouse gas measurement index and formula to external stakeholders.

Meanwhile, the quantitative measurement of ESG performance is also spreading globally. The Value Balancing Alliance (VBA), launched by SK with more than 20 global companies and organizations such as BASF and Novartis in order to develop a global measurement model, is currently expanding its influence by collaborating with the International Financial Reporting Standards (IFRS) and the World Economic Forum (WEF), and Harvard Business School (HBS). SK plans to lead the global standardization of social performance measurement by strengthening cooperation with these organizations.

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, news.skhynix.com.

Media Contact

SK hynix Inc.
Global Public Relations

Technical Leader
Jaehwan Kevin Kim
E-Mail: global_newsroom@skhynix.com

Technical Leader
Eun Suk Yixi Lee
E-Mail: global_newsroom@skhynix.com

Technical Leader
Sejin Julia Yoo
E-Mail: global_newsroom@skhynix.com

The post SK hynix Announces 2020 Social Value (SV) Achievements first appeared on SK hynix Newsroom.

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SK hynix held its 73rd General Shareholders Meeting on March 30th at the SUPEX Hall of the SUPEX Center at Icheon Campus, South Korea.

The meeting was held simultaneously both online and offline this year for the first time as an effort to prevent the spread of COVID-19. Shareholders who signed up for participation in advance were able to join the meeting by watching a video webcast in real-time.

At the meeting, SK hynix introduced its Financial Story during a separate session, in addition to general procedures such as approval of financial statements, appointment of executive directors and non-executive directors, and approval of directors’ remuneration limits. Through this session, shareholders were able to hear detailed explanations from the SK hynix CEO Seok-hee Lee about the company’s willingness to increase the shareholder value, as well as the future plan pursued by the company.

Meanwhile, the shareholders of SK hynix decided on all the agendas at the meeting.

Financial Results Improved under Challenging Conditions in 2020

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CEO Lee, as the chairman of the meeting, said in the business report, “Amid difficult conditions including COVID-19 and the rapidly changing global business environment, SK hynix achieved KRW 32 trillion in sales and KRW 5 trillion in operating profit in 2020, which is highly improved compared to the previous year, through rapid development of leading technology and flexible response to demand.”

Also, CEO Lee cited some notable accomplishments last year, including growth in server DRAM, improvement in portfolios of NAND Flash products and customers, and establishment of foundation for mid- to long-term growth. He explained that with excellent quality competitiveness, the sales of 1Ynm-based high-capacity DRAM modules increased. In case of NAND Flash, cost competitiveness was enhanced through rapid mass-production of 128-layer products, and solid state drive (SSD) sales targeting data centers increased compared to the previous year. For mid- to long-term growth, he explained that SK hynix signed a contract to acquire the NAND and SSD business from Intel, established foundation for mass-production using EUV at the M16 fab, joined the RE100 initiative, and continued preparation of the Yongin Semiconductor Cluster project.

CEO Lee concluded the report by highlighting the targets for this year to ensure that these achievements pave way for SK hynix’s sustainable growth. The targets include maximizing the market position for high value-added strategic products based on quality competitiveness, improving production efficiency by building smart fab environment, innovating cost structure through increasing efficiency of investment and asset, successfully implementing the first stage of the Intel NAND and SSD business acquisition contract, and enhancing fundamental capabilities to create synergy.

CEO Lee Shares Financial Story with Shareholders as “The Exciting Vision of the Future”

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“SK hynix will evolve into a ‘Great Company’ that contributes to humanity and society with technology.”

At today’s General Shareholders Meeting, CEO Lee presented the “Financial Story” along with the company’s future vision.

CEO Lee said, “The goal of ‘boosting the corporate value to KRW 100 trillion’ that I presented when I was appointed as CEO two years ago was achieved earlier this year, earlier than expected. Now, we want to aim higher. Based on the Financial Story, we will promote the company’s growth with two main pillars of DRAM and NAND Flash, and accelerate the growth of shareholder value.”

Major affiliates of SK Group are communicating with their stakeholders to incorporate SK Group Chairman Chey Tae-Won’s “Financial Story” into the companies’ future growth direction. SK hynix reflected in this story its direction of enhancing the corporate value by focusing on ESG management, while strengthening the competitiveness in the DRAM and NAND Flash businesses. CEO Lee said, “We will focus on creating social values on top of economic values.”

CEO Lee announced that the company will focus on improving the profitability of the NAND business, in terms of economic values. SK hynix invested in KIOXIA Holdings Corporation (formerly Toshiba Memory) in 2018 and signed a contract to acquire the NAND and SSD business of Intel in October 2020. Regarding this contract, CEO Lee said, “As SK hynix has strength in mobile NAND Flash and Intel in enterprise SSD (eSSD), potential synergy is expected from this acquisition. The completion of the acquisition process will allow us to leap forward to becoming one of the global leaders in the NAND business, as well as DRAM business.”

In addition, CEO Lee presented SSD as an example of business that can create both economic and social values. CEO Lee said, “If hard disk drives (HDDs), one of the representative storage devices, are entirely replaced with low-power SSDs, carbon dioxide emissions can be reduced by 93%. As well as economic values created through the technological prowess of SSDs, social values can be created by contributing to solving environmental problems.

At the shareholders meeting, CEO Lee also introduced the direction for the future investment. He announced that the company will invest intensively in three areas including R&D, ESG management, and discovery of future growth sources.

CEO Lee said, “SK hynix is envisioning a plan to establish infrastructure for intensive R&D development in various regions including the U.S. and Europe. In terms of strengthening ESG management, we will faithfully prepare for RE100 initiative, a goal to procure 100% of the power consumed with renewable energy, and the ‘Carbon Net Zero’ declaration. Also, the company will discover and invest in promising companies in the innovative fields like AI, autonomous driving, and 5G.”

Finally, CEO Lee stressed that SK hynix will prepare new growth sources thoroughly while pursuing ESG, and urged the shareholder to join “the journey of SK hynix growing into a ‘Great Company’”.

Shareholders Welcome Online Meeting As CEO Gives Answers Directly

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SK hynix also listened to shareholders’ opinions proactively, by receiving questions in advance from those who attended the meeting remotely.

Many of the questions that arrived in advance included inquiries about the company’s dividend policy. Regarding this, CEO Lee said, “The ‘2019-2021 Dividend Policy’ informed through the public notice in January 2020 specifies that, in each fiscal year, the company will provide cash dividend that includes 5% of the free cash flow (the calculation standard is established by excluding the acquisition amount of tangible assets from the operating cash flows in the consolidated cash flow statement) created during the year, in addition to the fixed dividend of KRW 1,000 per share. Until the dividend at the end of the term of 2021, the company plans to calculate the dividend in accordance with that policy. For the dividend policy after that, we will transparently communicate with shareholders, by comprehensively considering and reviewing the industry conditions, earnings volatility, and the possibility of shareholders’ dividend predictions.”

There were also many questions on the likely positive effects of the planned completion of the deal to acquire Intel’s NAND and SSD business. CEO Lee answered the questions in accordance with his explanation of the Financial Story.

One of the shareholders who attended the online meeting said, “I was very hesitant to go to the meeting due to COVID-19, but was able to attend it online for the first time. I appreciate that the CEO answered my questions directly, and the fact that even a minority shareholder like myself could exercise shareholder rights easily via electronic voting.”

The post SK hynix holds General Shareholders Meeting Online and Offline Simultaneously to Share ‘Financial Story’ and Willingness to Increase Shareholder Value first appeared on SK hynix Newsroom.