SK Hynix Set To Lose Edge Versus Micron and Samsung As US Embargo Weighs, Analyst Says - (HXSCL)

SK Hynix Inc HXSCL called the U.S. semiconductor embargo on China "painful" as it slashed its 2023 capital expenditure, the Financial Times reported.
The Chinese chipmaker cut its Capex guidance by more than 50% after reporting a 60% drop in third-quarter operating profit due to higher inflation and sluggish global growth, missing market expectations.
Due to the restrictions, SK Hynix expected difficulties upgrading its plant in Wuxi, China.
The Wuxi plant accounts for nearly half of SK Hynix's production of D-Ram chips used in computers, smartphones, and servers.
The chipmaker followed rivals, including U.S.-based Micron Technology, Inc MU and Japan's Kioxia Holdings, cutting production after memory chip prices slid about 20% in Q3.
SK Hynix would gradually reduce output, starting with lower-margin products, as the industry confronted "an unprecedented deterioration in market conditions."
SK Hynix won a one-year exemption from the US restrictions.
SK Hynix warned against its struggle to bring the most cutting-edge technology into China, which could increase production costs.
Analysts expect the Wuxi factory's competitiveness against Samsung Electronics Co, Ltd SSNLF and Micron Technology to significantly weaken in two to three years if SK Hynix cannot ship EUV machines to China.
Chinese chipmaker Yangtze Memory Technologies Corp ousted American employees in core tech positions following the U.S. embargo on China.
YMTC's longstanding CEO Simon Yang, a U.S. passport holder, stepped down ahead of the sanctions reportedly triggered by Washington's increasing pressure on the company.
Yang transitioned from the Chief role in late September to Deputy Chair. His current position in the company remained undecided.
Price Action: MU shares traded higher by 0.46% at $56.12 on the last check Wednesday.

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