SK Hynix’s net income in Q1 jumps a lofty 61%

Chip maker SK Hynix’s first quarter beat expectations by the market, boosted by healthy demand for memory chips from handset device makers.

SK Hynix, which supplies chips to Samsung Electronics and Apple, posted operating profit of 1.6 trillion won ($1.48 billion) for the first quarter compared with 1.1 trillion won for the same period a year earlier, a 50 percent increase.

Sales rose to 4.8 trillion won in the first quarter from 3.7 trillion won a year earlier, a 29 percent rise.

The company’s net income hit 1.3 trillion won for the first three months, a 61 percent jump from the same period last year.

The strong performance is primarily attributed to the great reception of Apple’s iPhone 6 models, offsetting a decline in semiconductor prices and seasonal weaknesses.

The company said DRAM shipments declined 5 percent from the previous quarter, while their average selling price went down 4 percent.

The shipments of NAND flash chip remained flat and their average price fell 7 percent.

The country’s second largest chipmaker after Samsung Electronics vowed to maintain the momentum by expanding production of 20-nanometer DRAMs in the second quarter, according to a statement released by the company.

“SK Hynix will also focus on accelerating mass-production of 10-nano NAND memory chip in the second quarter along with the production of 3-bit 3D NAND Flash SSD,” the company said.

SK Hynix said it expects demand to grow boosted by the mobile and server markets. As data traffic and demand for big data analysis increases, the company forecast that demand for server memory-use DRAMs should increase, while transition to high-speed DDR4 chips should also spark growth.

The company reported record net profit for 2014, which reached 4.1 trillion won, up 46 percent from a year earlier.

Revenues last year were 17.1 trillion won, up 21 percent from a year ago, while operating profit also jumped 51 percent to 5.1 trillion won.

“SK Hynix will continue its efforts to reduce costs to stay strong amid uncertain market conditions and declines in prices,” said a public relations official of SK Hynix.

The good performance also allowed SK Hynix to move up a notch to become the world’s fourth-largest chip player in 2014, data by IHS Technology said.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]