SK Hynix Profit Lags Estimates on Higher Chip Investment

SK Hynix posted third-quarter earnings that fell short of analyst estimates after boosting investment in production to capture a rally in memory chip prices, according to Bloomberg.

Operating profit rose five-fold to 3.74 trillion won ($3.3 billion) in the quarter, the Icheon, the company said in a statement. That was less than the 3.81 trillion-won average of estimates compiled by Bloomberg. Shares of Hynix fell as much as 3.2 percent before trading in Seoul.

Hynix is using the buoyancy in chip prices to bolster its position in the industry with increased spending. The company is part of a group led by Bain Capital that agreed to buy Toshiba’s memory business while also investing in its own production. Hynix ranks fifth in NAND market share even though it trails only Samsung in DRAM.

Hynix said sales for the quarter climbed to 8.1 trillion won with net income of 3.06 trillion won, both of which topped analyst projections. The company spent about 5 trillion won increasing its production capacity in the first half of this year and has signaled plans for further investment.