Korean memory gains SK hynix is considering buying South Korean government bonds, according to a senior official. The report follows earlier news that had claimed that the memory company would bring back a portion of the funds generated through its American Depository Receipt (ADR) listing last week to its home country in order to invest in memory chip manufacturing facilities. The executive's comments come as the firm is expected to experience slower high bandwidth memory (HBM) price growth stemming from long-term supply agreements.
SK hynix is Open to Shifting Some of Its Capital Into Korean Government Debt, Says Report
SK hynix's multi-billion dollar capital raise through its ADRs last week set a new record and came at a time when the global memory chip industry is experiencing a major chip shortage. This shortage, spurred by the high demand for AI chips, has also transformed the Korean memory manufacturer overnight.
The firm's employees have benefited from hefty bonuses for their services, so much so that the Korean central bank, the Bank of Korea, has flagged their payments as creating inflationary risks for the broader Korean economy. SK hynix pays 10% of its operating profit as a bonus to employees, and its generosity also led Samsung to agree to a 10.5% bonus after its workers threatened strikes to shut down crucial memory chip production.
Now, according to a senior SK hynix official quoted by Yonhap Infomax, the firm might also end up buying Korean government debt. The firm's relation with the Korean economy was thrust into the spotlight earlier this year when Kim Yong-beom, the Chief Presidential Secretary for Policy to South Korea's President Lee Jae-myung, suggested that tax revenues from the firm could be distributed as dividends to Koreans.
Kim argued that SK hynix's success was built on Korean industrial achievements, but clarified later that he was referring to existing tax revenue and not additional levies after markets reacted negatively to his proposal.
While some estimates suggest that the firm's workers could receive up to $900,000 in bonuses next year, a report from KIS' semiconductor division suggests that memory prices might stabilize due to the long-term agreements signed by SK hynix. In a fresh report, analyst Minsook Chae writes that average HBM selling prices can rise more slowly than expected, with blended and commodity DRAM chips also experiencing similar trends. However, the analyst adds that instead of being a headwind, the slowdown is a reflection of long-term agreements being signed in the industry.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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