SK Hynix Profit Tops Estimates

SK Hynix, a supplier of memory chips to Apple, posted fourth-quarter profit that topped analysts’ estimates as semiconductor prices surged on robust demand for bigger storage in mobile devices and computers, according to Bloomberg.

Operating profit rose 55 percent to 1.54 trillion won ($1.3 billion) in the three months ended December, the company said in a statement. That compares with the 1.28 trillion-won average of estimates compiled by Bloomberg. Sales climbed 21 percent to 5.36 trillion won.

Increasing demand for dynamic random-access memory for PCs and mobile devices has combined with a shortage of supply to drive up prices and help SK Hynix boost margins. Prices of benchmark DDR3 4-gigabit dynamic random access chips rose to $2.79 at the end of the quarter from $1.84 a year earlier.

The chipmaker also benefited from rising NAND memory prices, as demand for 3D chips rose and supply remains limited. NAND refers to chips used to store data in phones, tablets and some PCs. The company’s shares rose 2.7 percent to 53,200 won as of 10:28 a.m. in Seoul.

Hynix last month said it will invest 2.21 trillion won on a new plant in Cheongju, south of Seoul, to meet increasing demand for NAND chips used in smartphones. It will spend another 950 billion won on its plant in Wuxi, China to raise capacity for DRAM.

Hynix will invest about 7 trillion won this year, investing more in NAND than DRAM this time, President Kim Joon-ho said after the earnings announcement. The company expects 20 percent growth in demand for DRAM and 30 percent growth in demand for NAND this year.