SK Hynix Posts Record Profit

SK Hynix posted its best-ever quarterly operating profit after strong demand for computer-server chips pushed up prices, boosting confidence in the Apple supplier’s bid for Toshiba’s semiconductor business, according to Bloomberg.

Hynix, the largest provider of DRAM chips after Samsung, is targeting the troubled Japanese company’s flash memory division as growth in its main market tapers off. Demand for DRAM may “ease somewhat“ in the second half as supply tightness eases, though the market will remain strong overall in 2017, President Kim Joon-ho said during a call with analysts.

Operating profit was 2.47 trillion won ($2.2 billion) in the three months ended March, the company said in a statement. That compares with the 2.25 trillion-won average of estimates compiled by Bloomberg. Sales were 6.29 trillion won, topping projections for 5.98 trillion won.

Hynix is keen to expand its footprint in the faster-growing market for NAND chips used in everything from smartphones to connected appliances. The company however won’t let its bid for the Toshiba unit, which is expected to fetch more than 2 trillion yen ($18 billion), detract from a 7 trillion won investment in chipmaking capacity this year, Kim said.

Hynix and Samsung control more than two-thirds of the market for DRAM, commoditized memory employed in phones and personal computers. But Hynix ranks just fifth in NAND, needed in smartphones and tablet computers for functions from playing videos and multitasking to storing books and photos. If Hynix acquires Toshiba’s chip unit, its NAND market share would rise to more than 30 percent, based on 2016 data, overtaking Micron.