SK hynix distances itself from global supply chain crisis in report to U.S. gov’t

SEOUL, Nov. 10 (Yonhap) — SK hynix Inc., a major global memory chip supplier, distanced itself from the on-going chip shortages that have snarled production of cars and consumer electronic products around the globe, a report filed with the United States showed Wednesday.

“Memory products have not been a source of chip shortages to downstream consumers,” South Korea’s No. 2 chipmaker said in the report made available for public viewing on the U.S. government website on federal decision making.

There was neither a backlog for products in the past few years nor an instance “where our availability of the supply caused issues for our customers’ electronics systems production,” the company said, attributing low memory supply-to-demand ratios to “the generally commoditized nature of memory products, the relative diversity of suppliers, and market driven prices.”

SK hynix made the filing Tuesday, two months after the U.S. Department of Commerce asked major chipmakers to “voluntarily” submit business information by Nov. 8 to “increase supply chain transparency” and “understand where bottlenecks may exit.” It was a follow-up measure of President Joe Biden’s executive order that directed “several federal agency actions to secure and strengthen America’s supply chains” for key products.

Samsung Electronics Co., the world’s biggest memory chip maker, also made the filing Tuesday, but its comments were not made available for public viewing on the website.

Both Samsung and SK hynix — the two dominant players in the global memory chip market — said they closely consulted with the Commerce Department and decided not to disclose sensitive information or data on customers deemed key to their business operations.

SK hynix said information related to its customers was not only held by the company but also by the customers, so it was not “within our sole discretion to disclose such information.”

It added that it was given “sufficient flexibility” when submitting information requested “without specifying customer names or data, which allows us to protect our customers’ interests.”

On the questions on capacity, the company said it “rarely has excess capacity,” which could result in “an unnecessary increase in production costs” in an industry with very high fixed costs.

The Commerce Department’s questionnaire consisted of 26 questions — 13 for semiconductor manufacturers, and the rest for intermediate and end users.

U.S. Commerce Secretary Gina Raimondo said Tuesday the request for trade data was an “inevitable” measure under “unprecedented” circumstances of a global supply shortage, during her meeting with South Korean Industry Minister Moon Sung-wook in Washington on Tuesday (local time).

During the talks, the two sides agreed to create a new director-level dialogue channel on semiconductors and to hold an inaugural meeting on Dec. 8.




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