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Seoul (AFP)
South Korean SK Hynix, the world's second largest maker of memory chips, saw operating profits fall by more than two-thirds in the first quarter due to lower prices, the group said Thursday.
Korean chip makers – led by giant Samsung Electronics – have posted record profits in recent years as their product prices soar.
But demand has started to decline as global market supply rises after manufacturers have invested billions of dollars in new plants.
SK Hynix provides Chinese companies, Huawei Technologies, from Apple with operating profits of 1.4 trillion won ($ 1.21 billion) between January and March, down 69% year-on-year.
Revenues fell 22% and net income dropped 65%.
DRAM chip shipments – commonly used in smartphones and computer servers – have dropped 8% qoq, due to a "seasonal slowdown and cautious purchase of servers", said the chip maker in a statement.
Average selling prices fell by 27 percent, he added.
The company is expecting DRAM chips demand recovery later this year, as new smartphones adopt its high-density chips.
"In the market where concerns about demand-side uncertainty and demand recovery expectations coexist, SK Hynix will focus on cost reduction and insurance." quality, "he said.
The company's shares rose more than three percent during morning trading in Seoul.
The numbers come after Samsung Electronics announced earlier this month a more than 60% drop in its operating profit in the first quarter due to weaker markets.
? AFP 2019
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