According to businesskorea, SK Hynix’s U.S. subsidiary Solidigm has decided to close its Korean branch in response to current industry challenges. This decision was mainly due to the declining industry situation and to improve operational efficiency.
According to industry insiders, Solidigm's Korean branch initially had only a few people working, but as its business conditions continued to decline, it eventually had to lay off all employees in July. This decision is seen by the company as an important step in improving operational efficiency to cope with industry challenges.
Solidigm is a subsidiary of SK Hynix, formerly known as Intel's NAND flash memory business unit. It was established as an independent company in December 2021 after being acquired by SK Hynix for US$9 billion. However, Solidigm has been facing operational challenges following its acquisition by SK Hynix and the current market downturn.
The fixed transaction price of memory cards and USB general-purpose NAND flash memory products has fallen to US$3.82 in August this year, which is a sharp decline from the average price of US$4.81 in May last year. In addition, corporate revenue losses are also increasing. Solidigm's net loss in the first half of this year has exceeded 2.2423 trillion won, an increase of more than eight times compared with the same period last year.
In response to these challenges, Solidigm has recently taken a series of measures to reduce expenses, including large-scale layoffs. Earlier reports stated that due to declining performance, Solidigm restructured approximately 100 employees at its U.S. headquarters in July, accounting for approximately 10% of its total U.S. headquarters employees. It is said that the targets of the layoffs are personnel in the fields of software (SW) and research and development (R&D) related to SSD.
Although the NAND flash memory market is facing challenges, recent news indicates that NAND prices have begun to gradually bottom out. Analyst Ming-Chi Kuo also wrote recently that Micron has begun to increase NAND Flash wafer contract prices in September, with an increase of about 10%. He predicts that Samsung and other original manufacturers may follow Micron's lead and make price adjustments.
For SK hynix, although the Korean branch of its U.S. subsidiary Solidigm has been closed, a company representative said, "As Solidigm headquarters is implementing operational efficiency measures, branches in certain regions, including South Korea, have been closed in the future. Domestic product sales will be through our headquarters or dealers."
In addition, due to the cost pressure brought by the rising prices of NAND Flash wafers, module manufacturers have recently expressed their intention to increase the price of end products, mainly in SSD products. Module manufacturers such as Kingston and Phison have recently returned to official prices for transactions and no longer allow customers to negotiate for low-price transactions. Kingston also said that due to the low price of its products, it will refuse customer price cuts from August and will rebuild some NAND inventories.