South Korea’s SK Hynix profits slump 69pc in first quarter

A tower is seen at a SK Hynix plant in Icheon, about 80km southeast of Seoul May 13, 2013. — Reuters pic
A tower is seen at a SK Hynix plant in Icheon, about 80km southeast of Seoul May 13, 2013. — Reuters pic

SEOUL, April 26 — 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 yesterday.

Korean chipmakers — led by the behemoth Samsung Electronics — have 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 (RM5.02 billion) in the January to March period, it said — down 69 per cent year-on-year.

Revenues dropped 22 per cent and net income slumped 65 per cent.

Shipments of DRAM chips — commonly used in smartphones and computer servers — dropped 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 per cent, 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 per cent in morning trading in Seoul.

The figures come after Samsung Electronics earlier this month warned of a more than 60 per cent plunge in first-quarter operating profit as markets weaken. — AFP

Related Articles