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Thursday, July 24, 2014
SK Hynix Says Chip Sales Remain Slow

Korean chipmaker SK Hynix Inc. on Thursday said shipment growth would slow in the third quarter as it posted its first drop in quarterly profit in two years.

A change in product mix and a transition to more complex production technology will crimp third-quarter shipments growth for the key DRAM business, SK Hynix President Kim Joon-ho told analysts during a conference call.

SK Hynix posted operating profit of 1.1 trillion won ($1.07 billion) for the April-June period. The result was 2.7 percent below the same quarter a year earlier.

The company's revenue fell 0.2 percent compared with the previous corresponding period.

President Kim said growth in shipments of DRAM chips would slow to a mid-single-digit percent rate in the third quarter, from 13 percent in the April-June period. Shipments of NAND chips, typically used in mobile devices, would slow to a high 20 percent rate from 54 percent.

However, SK Hynix tipped firm market conditions amid a seasonal pickup in demand for consumer electronics products as well as cautious capacity management among chipmakers.

"DRAM market trends will remain favorable due to better-than-expected demand for personal computers as well as data centre-related server demand," Kim said.

"The launch of new mobile products by major companies and the development of LTE-related demand in China will likely keep demand-side conditions firm," he added, referring to China's next-generation mobile network.

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