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SK Hynix Posts Record Q3 Profit on Firm Chip Demand

Memory chip makers have enjoyed strong profits so far this year thanks to better-than-expected demand for PCs and servers.

SK Hynix, the world’s second-biggest memory chip maker, reported record quarterly profit for the July-September period as the launch of new smartphones and steady demand from the personal computer sector boosted earnings.

The firm said shipments of DRAM chips used mainly in personal computers rose seven percent from the previous period, while its average selling price held steady. Shipments for NAND chips, used mainly in mobile devices, climbed 26 percent although their average price fell two percent.

Memory chip makers have enjoyed strong profits so far this year thanks to better-than-expected demand for personal computers and servers as well as to careful capacity management.

The South Korean firm, which competes with Samsung Electronics and Micron Technology, reported an operating profit of 1.3 trillion won ($1.24 billion), matching the mean forecast from a Thomson Reuters I/B/E/S poll of 36 analysts.

Revenue grew 5.6 percent from a year earlier to 4.3 trillion won, also a quarterly record, with growth in every product group.

Samsung’s plan to invest nearly $15 billion in a new South Korean chip plant has sparked worries about a price war, although analysts say the facility probably will not impact global supply until 2017.

Samsung Chief Executive Kwon Oh-hyun told reporters earlier this month he did not expect a price war to break out next year, supporting a widely held belief that memory market conditions will remain healthy until at least 2015.

Market researcher DRAMeXchange said that average contract prices for four-gigabyte DRAM chips rose by 2.34 percent in the first half of October and that additional price increases were likely due to strong demand for mobile phones and servers.

Rival Micron late last month reported better-than-expected results for its fiscal fourth quarter.

(Reporting by Se Young Lee; Editing by Stephen Coates)

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