(LEAD) SK hynix posts forecast-beating Q1 earnings

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By Kim Han-joo

SEOUL, April 23 (Yonhap) -- SK hynix Inc. on Thursday reported better than expected first-quarter earnings, apparently aided by robust demand for server chips despite the ongoing new coronavirus pandemic.

The net profit for South Korea's No. 2 memory chip producer came to 649.1 billion won (US$526 million) in the January-March period, down 41.1 percent from a year earlier, the company said in a regulatory filing.

Operating profit fell 41.4 percent on-year to 800.3 billion won during the cited period, while sales increased 6.3 percent on-year to 7.19 trillion won.

The figures were better than expected. The company was projected to have logged 504.7 billion won in operating income in the January-March period, according to the data from 17 local brokerage houses compiled by Yonhap Infomax, the financial news arm of Yonhap News Agency.

SK hynix said it expects to log better-than-expected earnings driven by increased sales of server products, yield rates improvement and cost reduction.

"SK hynix will minimize potential risks caused by COVID-19, and set up future technology innovation and infrastructure to timely react to 5G and server-based growth momentum," CFR Cha Jin-seok said in a press release.

Bolstered by a boom in the global semiconductor market, SK hynix and local bigger rival Samsung Electronics Co. had registered record earnings in recent years, spearheading South Korea's export growth.

SK hynix's operating profit reached its peak in the third quarter of 2018 when it racked up 6.4 trillion won. However, the company only bagged 236 billion won in operating profit in the fourth quarter of 2019 due to falling chip prices.

According to industry tracker DRAMeXchange, the average contract price of 8-gigabit DDR4 DRAM, a benchmark price for the category, reached $2.94 in March, up 2.1 percent from a month earlier, extending its price hike to a third consecutive month. The average price of 32-gigabyte server DRAM was $121 as of end-March, up 4.3 percent from a month ago, according to DRAMeXchange.

khj@yna.co.kr
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