SK Hynix more upbeat than rivals on rising memory-chip demand – Reuters

The logo of SK Hynix is seen at its headquarters in Seongnam, South Korea, April 25, 2016. REUTERS/Kim Hong-Ji
SEOUL, Oct 26 (Reuters) – SK Hynix (000660.KS) forecast steady demand for memory chips on Tuesday as it posted its highest quarterly operating profit in nearly three years on the back of rising prices, striking a more bullish note than rivals including Micron (MU.O).
SK Hynix and other other chipmakers have been hit by slowing personal computer sales after a pandemic-led surge, but the South Korean company said supply bottlenecks had created pent-up demand for PC chips that could boost sales next year.
"There have been a lot of uncertainties recently, but I think memory is still doing business at a level that provides good supply and predictability compared to other semiconductors," SK Hynix's chief financial officer, Kevin Noh, told an earnings call.
Intel (INTC.O) said earlier this month shortages of other chips were stopping its customers from shipping PCs and servers, echoing comments from Micron. read more
Corporate demand and changing hybrid working environments would also underpin PC chip demand, said SK Hynix, which trails only Samsung Electronics Co Ltd (005930.KS) in DRAM chips used for temporary storage in PCs, servers and mobile devices.
An expected replacement cycle of equipment bought by data centres during 2017-2018 will create demand for server chips, Hynix added.
SK Hynix shares rose 3% on Tuesday compared with a 0.6% rise in the wider market (.KS11).
Operating profit rose to 4.2 trillion won ($3.6 billion) in the July-September quarter, up from 1.3 trillion won a year earlier, SK Hynix said.
That was its highest quarterly profit since the fourth quarter of 2018, and above a Refinitiv Smartestimate of 4.1 trillion won from 18 analysts.
The Apple Inc (AAPL.O) supplier's NAND business turned profitable for the first time since the fourth quarter of 2018, analysts said. NAND chips are used for permanent storage in mobile devices and servers.
SK Hynix said it expected Chinese regulators to approve its deal to buy Intel's NAND business this year.
Analysts said the company had improved the yield of its 128-layer NAND flash chips that serve the data storage market, which would propel shipments.
SK Hynix said third-quarter revenue rose 45% on-year to a record 11.8 trillion won.
($1 = 1,177.2300 won)
Our Standards: The Thomson Reuters Trust Principles.
Subscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
Facebook Inc said on Monday it will start publishing the financial results of its augmented and virtual reality labs as a separate unit, where it is investing billions in its ambitions to build the "metaverse" and as it reported that its main advertising business faces "significant uncertainty."
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Information, analytics and exclusive news on financial markets – delivered in an intuitive desktop and mobile interface.
Access to real-time, reference, and non-real time data in the cloud to power your enterprise.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2021 Reuters. All rights reserved

source