Business Performance
For the second quarter in a row, SK Hynix achieved its highest-ever quarterly figures for sales and operating profits, even with a massive fire at its factory in Wuxi, China.
On October 29, the world’s second-largest manufacturer of computer memory chips announced its performance results in the third quarter this year. It attained 4.84 trillion won (US$4.55 billion) of sales and 1.164 trillion won (US$1.10 billion) in operating profits. Its net profits, on the other hand, amounted to 958 billion won (US$901 million), after reflecting non-operating expenses. The Q3 results are the highest, beating its own previous records in Q2 with 3.933 trillion won (US$3.7 million) in sales and 1.114 trillion won (US$1.048 billion) in profits.
An SK Hynix official said that the company was able to record more than 4 trillion won (US$3.76 billion) in sales for the first time. It is attributable to a rise in DRAM prices and an increase in the shipment volume of NAND flash memory chips.
In the third quarter, the average sales price for DRAM was up 5% from the previous quarter, but down 2% in DRAM shipment volume. The increased average sales price derives from continuing price hikes in PC and server DRAM, while the decreased shipment volume arises from reduced sales caused by the fire damage.
In contrast, the average sales price for NAND flash memory dropped 6%, but its shipment volume rose 11% from Q2 because of growing demands from mobile phone manufacturers.
The memory-chip maker predicts that the demand for PC and server DRAM in Q4 will continue to grow, owing to a rise in the amount of DRAM used in 2-in-1 PC/tablet devices. On top of that, it anticipates that demands for graphic DRAM will continue to rise, stemming from new gaming and video game consoles, along with surging demand for mobile DRAM.
The company also expects that the demand-supply gap in the global DRAM market will narrow, since supply shortfalls for DRAM caused by the fire in Wuxi are forecast to be offset by utilizing NAND flash-making equipment in DRAM production.
In the short term, SK Hynix is seeking to complete the development of 20-nano mid-class mobile DRAM and 10-nano class NAND flash memory chips, and bring them to mass production. Its long-term plan is to generate continuous and steady profits in the memory industry.