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SK Hynix reports record quarterly revenue, profit on strong chip demand
[SEOUL] South Korea's SK Hynix Inc said its first-quarter operating profit more than quadrupled from a year earlier on strong demand for memory chips, pushing it to a record-high quarterly profit and beating already high market expectations.
The world's second-biggest memory chip maker behind Samsung Electronics Co Ltd said on Tuesday its January-March profit rose 339 per cent to 2.5 trillion won (S$3.08 billion). That compared with a 2.4 trillion won Thomson Reuters StarMine SmartEstimate from a survey of 24 analysts.
Revenue rose 72 per cent year on a year earlier to 6.3 trillion won, also a quarterly record for the company.
The result is the industry's first in a year in which analysts are expecting earnings records as supply constraints and demand for more firepower on devices such as smartphones and servers push up chip prices and widen profit margins.
Researcher IHS expects revenue in the memory industry this year to grow 32 per cent to a record US$104 billion.
SK Hynix said first-quarter DRAM chip shipments fell 5 per cent from October-December while average selling prices rose 24 per cent. NAND chip shipments fell 3 per cent while the average price rose 15 per cent.
Earnings aside, investors are watching how the ongoing sale of Toshiba Corp's chip business might affect SK Hynix and other memory chip makers. SK Hynix is widely believed to be among bidders for the business, the world's second-largest NAND chip manufacturer behind Samsung.
Some analysts have said potential suitors such as Taiwan's Hon Hai Precision Industry Co Ltd (Foxconn) might be more aggressive in boosting investment and output should they acquire the business, igniting a price war and hurting profitability.