​SK Hynix profit drops 18 percent due to slowdown in PC, mobile

SK Hynix saw its profit drop 18 percent for the first quarter as, like its rivals Samsung and Micron, it attempts to steer through the lowered demand for memory chips from the PC and mobile markets.
Written by Cho Mu-Hyun, Contributing Writer

SK Hynix, the world's second-largest memory chip maker, saw its profit drop 18 percent year-on-year for the first quarter of the year due to slow recovery in the PC market and lowered demand from the mobile market.

It posted a net profit of 448 billion won ($389 million) and an operating profit of 562 billion won with revenue of 3.656 trillion won.

From the previous quarter, revenue and operating profits dropped 17 percent and 43 percent due to the lowered demand for DRAMs in the January-March period.

Overall DRAM shipment decreased 3 percent but the average sales price dropped a significant 14 percent. NAND flashes, due to the drop in demand from mobile, saw shipment fall 11 percent and sales price 12 percent.

Smartphones have powered the NAND output of memory giants such as Samsung, SK Hynix, and Micron but the market slump has eaten away at their shipments and price.

Biggest buyers Apple and Samsung still ship considerable volumes of smartphones but less so than their peak in 2013 and 2014.

SK Hynix sells its product to Apple, Samsung, LG, and Chinese vendors.

The company said quick recovery in DRAMs will be unlikely but new smartphones and chipsets will increase DRAM demand going forward. In NAND flashes, the increased capacity of chips will boost per chip price and continued growth of the solid-state drive (SSD) market allows for a "positive outlook," it said.

SK Hynix said it will also focus research into 10-nanometer class DRAMs. It currently sells 20-nanometer class DRAMs while rival Samsung has already commercialised them. Micron is also focusing on migrating to 10-nanometer class.

It is also playing catch-up to its compatriots in 3D V-NAND and will begin selling them in the second half of the year.

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