SK hynix Inc. (KRX: 000660) is a South Korean memory semiconductor supplier of dynamic random-access memory (DRAM) chips and flash memory chips. Hynix is the world's second-largest memory chipmaker (after Samsung Electronics) and the world's 3rd-largest semiconductor company. Founded as Hyundai Electronic Industrial Co., Ltd. in 1983 and known as Hyundai Electronics, the company has manufacturing sites in Korea, the United States, China and Taiwan. In 2012, when SK Telecom became its major shareholder, Hynix merged to SK Group (the third largest conglomerate in South Korea).
|Founded||1983 as Hyundai Electric Industry
2001 as Hynix Semiconductors2012 as SK hynix
|Headquarters||Icheon, South Korea|
|Seok-hee Lee (CEO)|
|Products||DRAM, NAND flash|
|Revenue||US$35.27 billion (2018)|
|US$18.34 billion (2018)|
|US$13.67 billion (2018)|
|Total assets||US$56.08 billion (2018)|
|Total equity||US$41.22 billion (2018)|
Number of employees
|Korea: 22,254 (2016)|
The company's major customers include Apple, Asus, Dell, HP Inc., and Hewlett Packard Enterprise (formerly Hewlett-Packard). Other products that use Hynix memory include DVD players, cellular phones, set-top boxes, personal digital assistants, networking equipment, and hard disk drives.
Criticism and controversiesEdit
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According to SK Hynix's "Annual Salary Rules," the employment rules for office workers, employees are to be paid from 90% to 110% of the contract wage depending on their annual evaluation. However, the so-called 'Self-Design' system was introduced in 2018, allowing managers to arbitrarily adjust each employee's salary. Under this system, differences in wages between departments and individuals occur even if they receive the same evaluation. It is a zero-sum where the head of the organization distributes a limited budget to his employees. This adjustment of wages shall be made by the subjective judgment of the head of the organization without any objective grounds or criteria. Under the newly introduced wage system, only 60 percent of the annual salary is guaranteed. It has been reported that a majority of employees in a specific department received less than 90% of the contract salary.
Such a system is a clear violation of Labor Standards Act of Korea, which requires the consent of a majority of workers if the employment rules are changed against workers. In 2020, SK Hynix Labor Union submitted a petition to the Gyeonggi Provincial Labor Relations Commission and sent an official letter to the company. In response, the company held a briefing session on the "Self-Design" system and tried to ask the consent of employees. The briefing session and consent process has many procedural defects, which caused more controversy.
Violent and Deceptive Revision of Employment RulesEdit
When the above mentioned illegal pay-cut became controversial, SK Hynix decided to hold a briefing session to ask consent of the employees, but it caused another controversy.
- They did not show the 'before and after' of the Employment Rules.
- They did not tell that it is a vote to decide whether the Employment Rules should be revised, thus most of the employees did not know that.
- Some directors and team leaders forced their employees to sign the agreement against each employee's free will.
- It was technically impossible to vote against the revision.
- Many employees realized that they were deceived and asked a retraction of their vote, but the HR department refused.
- Even though it was a briefing session, there was various tools such as screenshot prevention which implies that such a briefing session is not to be justified.
Due to the various procedural defects mentioned above, such consent procedures are of course invalid.
Workers who have been disadvantaged by wage cuts due to illegal changes in the company's employment rules can later claim the amount of their lost wages to the company. In addition, according to the Supreme Court's ruling, even if the employment rules are changed later through due process, favorable contents in the previous labor contract shall prevail for workers who do not agree to change the employment rules.
2020 Incentive Bonus ControversyEdit
In January 2021, employees are complaining about the decision to pay a bonus of 20% of their annual salary. This is because performance-based bonuses were less than half of Samsung Electronics' peers. Samsung Electronics' sales and operating profit are far above SK Hynix's size, so there is no reason to pay the same performance-based bonus simply because of its increased operating profit, but the amount of performance-based bonus has not changed at all compared to 19 years. Sales and operating profit increased by 18.2% and 84.3% compared to 19 years, but the scale of performance-based bonuses has been set due to the management's unilateral notification.
This was the complete opposite of what the company emphasized the most at the job briefing session since 2018, when operating profit was significant, so there is a great backlash from low-year new employees. It attracted a large number of highly educated new employees under the bait of giving them the same or more than S company, but since that year, similar performance-based bonuses have never been paid to Samsung Electronics, and less than half have been paid in 2020, causing significant repercussions.
As complaints from employees continued, SK Chairman Choi Tae-won declared, "I will return all last year's salary." For your information, as of 2019, Chairman Choi's annual salary was around 3 billion won, and even if the number of SK Hynix employees was divided by 28,000, it was only 100,000 won per person, which made only oil pour.
Conflicts with employees are escalating further as the management believes that the payment was made based on a set standard, but does not present any of the criteria at all. There is no sympathy from employees because only the principle standard of paying excess profits of economic value-added (EVA) is being put forward, and even the proposed EVA is changing every announcement, and resistance continues.
Due to the nature of the semiconductor industry, which is actively moving to the same industry, attracting manpower is important, but due to the reform of various wage systems, there has been a controversy over performance-based pay.
- 1949:Founded as Gukdo construction.
- 1983: Incoroporated and renamed as Hyundai Electronics Industries Co., Ltd.
- 1985: Started mass production of 256K DRAM
- 1986: The Hyundai-manufactured Blue Chip PC was sold in discount and toy stores throughout the US. It is one of the earliest PC clones marketed toward consumers instead of business.
- 1993: Took over Maxtor (US HDD main factory)
- 1996: Initial public offering on the Korea Stock Exchange
- 1999: Merged with LG Semiconductor Co., Ltd(founded in 1979), then a division of LG Electronics.
- 2000: Spun off Hyundai Image Quest, Hyundai Autonet and Hyundai Calibration & Certification Technologies
- 2001: Changed the company name to Hynix Semiconductor Inc. (from Hyundai Electronics); spun off Hyundai Syscomm, Hyundai CuriTel, and Hyundai Networks; completed spin-off from Hyundai Group
- 2002: Sold HYDIS, TFT-LCD Business Unit
- 2004: Signed System IC Business Transfer Agreement with System Semiconductor
- 2005: Emerged from Corporate Restructuring Promotion Act ahead of schedule. Fined US$185M for involvement in DRAM price fixing cartel.
- 2006: Posted record the highest revenues since foundation
Established global manufacturing network with complete construction of Hynix-ST Semiconductor Inc.
Hynix's wholly owned manufacturing subsidiary in China
- 2007: Appointed Jong-Kap Kim as the new Chairman & CEO
- 2009: Company put up for sale by its lenders after it defaulted on loans and a subsequent debt-equity swap
- 2010: Fine of €51.47 million for illegally fixing prices with eight other memory chip makers.
In January 2010, Hynix Semiconductor Inc was put up for sale in an auction valued at close to $3 billion.
On 31 August 2010, HP announced collaboration with Hynix to bring memristor to high volume manufacturing step (targeted for 2013).
- 2012: SK Group, the third-largest conglomerate in South Korea, acquired a 21.05% stake in Hynix.
- 2013: Fab 1 and Fab 2 in China both suffered a massive fire which took the factories offline temporarily.
- 2014: SK hynix acquired the firmware division of Softeq Development FLLC to make it a part of its global R&D network alongside Italy-based Ideaflash S.r.l, Link_A_Media Devices and Violin Memory in the US, and Taiwanese Innostor Technology.
- 2020: Hynix announces agreement to purchase Intel's NAND business for $9 billion, expected to close in 2021.
Hynix produces a variety of semiconductor memories, including:
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