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SK Hynix Expects High Demand for DRAMs to Continue in H2
Amid Concerns over Chip Boom Peaking
SK Hynix Expects High Demand for DRAMs to Continue in H2
  • By Youn Won-chang
  • July 27, 2018, 14:32
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SK hynix

SK hynix, which recorded the highest sales in the second quarter of this year, has presented a positive outlook for the DRAMs and NAND chips for the second half of the year.

The company's rosy forecast came amid growing concerns that the ongoing semiconductor super cycle would come to an end soon.

SK hynix offered its latest projections for the second half during a conferernce call that was hosted by Lee Myeong-young, the company’s vice president of management support and finance, on July 26.

SK hynix said, "Despite slowing demand for mobile DRAMs in the first half of this year, solid demand for server DRAMs offset this, improving DRAM market conditions."

The company expected that server DRAMs will continue to drive demand in the second half of the year. SK hynix said, "The investment plans of major Internet data centers in the United States and China are being upgraded. Their effort to secure new data centers and many companies’ conversion to cloud will continue to boost demand for server DRAMs.”

"In the second half of the year, cloud service providers are planning to launch new services," said the company. "The upfront investment aimed at expanding server infrastructure will drive strong demand."

In the mobile market, demand for chips will be buttressed by the release of new smartphones with more memory usage and the effect of entering the summer peak season.

In addition, the company analyzed that demands for game-related DRAMs such as high-end PCs for gaming and game-specific smartphones, is also contributing more and more to overall demand.

As for the NAND market, "the price will continue to drop as supply increased due to higher inventory levels of chip producers and the shift in their focus to higher capacity products."

However, “Increase in demand for NAND is accelerating due to the seasonal high demand and high price elasticity. This will cover the increasing supply,” said the company.

Considering this market situation, SK hynix said, "We are aiming at low-20% annual growth in the shipment of DRAMs and a mid-40% annual increase for the shipment of NAND."

In the short term, it is aiming to increase shipments in the third and fourth quarter by a single digit for DRAMs and mid-30% for NAND.

In particular, regarding concerns about the effect of dropping NAND prices on profitability, the company said, “We will maintain profitability by continuing cost reduction and mixing product groups. We will make sure that the profitability of the second half of the year is maintained at the level of the first half."