SK Hynix earmarks 6 trillion won

SK Hynix is setting aside a massive 6 trillion won ($4.9 billion) for investment this year, laying the groundwork for future growth amid challenges ranging from sluggish demand for personal computers to a rising number of Chinese competitors.

The size of the investment is similar to last year’s, when the world’s second-largest memory chip producer after Samsung Electronics earmarked a record-breaking amount.

Formerly called Hynix, the DRAM supplier for Apple’s iPhone was acquired by SK Group in 2012.

The nation’s third-largest conglomerate took bold steps that included expanding facilities by over 10 percent, at a time when the overall chip industry was shrinking and losing investment.

The moves paid off, and the chipmaker has reported record-breaking earnings every year since the acquisition.

“We intend to continue making investments using our signature capability to overcome crisis and to strengthen future competitiveness,” said an SK spokesman.

“We will switch the impending crisis into opportunity and tighten the groundwork for growth.”

SK plans to invest some of the money in a new factory to be built in Cheongju, North Chungcheng, which the company needs in the mid- to long-term to keep up with growing demand for memory chips. The largest spending will be on the development of new products to keep its price competitiveness high, like DRAM chips with a new 1X-nano (18nm) processor and 3D NAND flash chips.

But on Thursday, SK Hynix shares edged down 0.71 percent to 27,900 won - the lowest in 52 weeks - on fears that its fourth-quarter earnings will fall short of market expectations. Analysts forecast operating profit could have been reduced by as much as 36 percent year-on-year for the October-December period last year.

BY SEO JI-EUN [seo.jieun@joongang.co.kr]