1 Trillion Won Deal
SK hynix will sell its water treatment center, a water purification facility for semiconductor factories, to secure cash assets of around one trillion won. The company has announced that it will spare no expense in investing in the production of high-value-added products in preparation for an upcoming boom.
SK hynix announced on July 10 that it will sell off its water treatment center at its Icheon Campus in Gyeonggi Province to SK reit.
SK reit completed its application for approval for the deal with the Ministry of Land, Infrastructure, and Transport on July 10. The two companies plan to hold a board meeting for a resolution on the deal by the end of July. Once the government approves the deal, they will finalize the price and complete an asset transfer process in the second half of this year. SK hynix will lease the water treatment center from SK reit after the sale.
In the semiconductor industry, the sale is expected to provide SK hynix with around one trillion won in cash equivalents. Some experts say that the company will make endeavors to improve its cashflow and financial conditions.
SK hynix had 6.4 trillion won (US$5.0 billion) in cash equivalents at the end of 2022, down by about 2.3 trillion won from the end of 2021. At the end of the first quarter of this year, they shrank further to 6.14 trillion won. Borrowings, including interest, amounted to 28.76 trillion won at the end of the first quarter, up by 5.76 trillion won from the end of the previous year.
Under these circumstances, SK hynix is focusing on securing funds through various means. Previously, the chipmaker issued 1.6949 trillion won in corporate bonds in the first quarter and 2.2377 trillion won in exchangeable bonds (EBs) in the second quarter. Recently, the company received 200 billion won in loans from Hana Bank.
SK hynix is securing funds to enhance its financial security and invest for a market boom in the future. In particular, the company will focus on products that have recently seen an increase in demand such as double-data-rate (DDR) 5 DRAM, low-power DDR (LPDDR) 5 DRAM, and high-bandwidth memory (HBM). The company will halve its CAPEX investment in 2023 compared to 2022 but will continue to invest in high-value products without a change in the investment plan.