SK Hynix profit rises as chip prices rebound

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SK Hynix profit rises as chip prices rebound

SK Hynix, a supplier of memory chips to Apple, posted third-quarter profit that beat analysts’ estimates as reduced inventories fed a rally in semiconductor prices.

Operating income was 726 billion won ($642 million) in the three months ended September, the Icheon-based company said Tuesday. That compares with the 660.4 billion-won average of estimates compiled by Bloomberg.

Semiconductor prices have surged this year amid limited supply as manufacturers trimmed output, helping boost profit margins. Apple, Hynix’s biggest customer, released new iPhones last month and Chinese vendors are adding premium components to stimulate sales.

“Demand was higher than expected,” Lee Seung-woo, a Seoul-based analyst at IBK Securities said.

Apple provides about 8 percent of Hynix sales.

Prices of benchmark DDR3 4-Gb dynamic random access chips rose to $2.01 as of Sept. 30 compared with $1.73 a quarter earlier, according to InSpectrum Tech.

Hynix posted a net income of 596.8 billion won, beating estimates of 498.1 billion won. The company’s shares closed at 40,150 won on Tuesday. The stock has risen 31 percent this year after sliding 36 percent in 2015. Bloomberg
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