SK Hynix profits slump 69pct in first quarter

26-Apr-2019 Intellasia | AFP | 6:00 AM Print This Post

South Korea’s SK Hynix, the world’s second-largest memory chip maker, saw operating profits plunge more than two-thirds in the first quarter in the face of lower prices, it said Thursday.

Korean chipmakersled by the behemoth Samsung Electronicshave enjoyed record profits in recent years as prices for their products soared.

But demand has started to decline while global market supply is increasing after manufacturers invested billions in new factories.

SK Hynix supplies to companies from Apple to China’s Huawei Technologies, and recorded operating profits of 1.4 trillion won ($1.21 billion) in the January to March period, it saiddown 69 percent year-on-year.

Revenues dropped 22 percent and net income slumped 65 percent.

Shipments of DRAM chipscommonly used in smartphones and computer serversdropped eight percent quarter-on-quarter, because of a “seasonal slowdown and conservative server purchases”, the chipmaker said in a statement.

Average selling prices dropped 27 percent, it added.

The firm expects demand for DRAM chips to recover later this year, with new smartphones adopting its high-density chips.

“In the market where concerns over the uncertainty about memory demand and expectations for demand recovery coexist, SK Hynix will concentrate on cost reduction and quality assurance,” it said.

Shares in the firm rose more than three percent in morning trading in Seoul.

The figures come after Samsung Electronics earlier this month warned of a more than 60 percent plunge in first-quarter operating profit as markets weaken.–finance.html


Category: Korea

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