Forex gains, chip prices put SK Hynix in the clear

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Forex gains, chip prices put SK Hynix in the clear

SK Hynix, the world’s No. 2 memory chip maker, said yesterday it returned to the black in the third quarter from a year earlier as foreign exchange gains helped offset lackluster global PC demand.

Net income totaled 2 billion won ($1.8 million) in the July-September period, turning around from a 562.6 billion won loss a year earlier, the company said in a regulatory filing.

Sales gained 5.8 percent on-year to 2.4 trillion won, while operating loss narrowed to 15.1 billion won from 276.8 billion won a year earlier.

The turnaround was attributed to foreign exchange-related gains as well as more stable NAND flash prices and increasing sales of high value-added products.

Powered by growing demand for mobile devices, SK Hynix saw NAND flash shipments increase 5 percent from three months earlier, while the average selling price gained 4 percent, it said.

The chipmaker, however, said a prolonged slump in the global PC market weighed on earnings.

“Although mobile DRAM bit shipments increased significantly on new product launches, it was not enough to offset slowing DRAM demand for PCs and servers,” said Executive Vice President Kim Joon-ho, noting that DRAM shipments and prices fell 5 percent and 8 percent, respectively, in the third quarter.

According to the data by International Data, global PC shipments sank 8.6 percent on-year to 87.8 million units in the third quarter as economic uncertainties and increasing use of mobile devices sapped PC demand.

Kim, however, said solid demand for smartphones and tablet PCs ramped up the portion of mobile DRAM products to over 30 percent for the first time.

SK Hynix painted a rosier picture for its expected future performance, projecting solid mobile sales and China’s booming low-end smartphone market would drive demand for mobile DRAM and NAND flash products.

While feeble PC demand may continue for some time, an additional DRAM price decline is likely to be limited as some manufacturers move to cut back supply, it said.

The company also pinned hopes on the Windows 8 platform, forecasting the upcoming release to stoke demand for PCs.

SK Hynix said it has invested 3.56 trillion won this year.


Yonhap

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