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May 30, 2017

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SK Hynix posts profit as chip demand improves

SEOUL--South Korean chip-maker SK Hynix Inc. reported a second straight quarterly profit as its debt load eased and sales benefited from increased demand for chips used in smartphones and servers.

The company said Wednesday its October-December net profit totaled 163.7 billion won (US$151 million) compared with a 239.-billion-won loss a year earlier. SK Hynix returned to the black in the July-September quarter with a 2-billion-won profit following a period of losses due to a slump in chip prices and weak demand.

Revenue was up 6.5 percent to 2.7 trillion won and operating profit totaled 55 billion won.

The company said it benefited from strong demand for chips used in mobile devices and servers, which offset lower demand for chips used in personal computers.

SK Hynix, which competes with bigger rivals Samsung Electronics Co. and Toshiba Corp., supplies chips to Apple Inc., Dell Inc. and Hewlett-Packard Co.

Rising smartphone sales in China and new product launches by its clients during the fourth quarter drove an increase in sales and prices of flash memory chips, Hynix said. The company also benefited from solid sales of affordable tablet PCs in emerging markets.

The stronger South Korean won reduced the value of Hynix's U.S. dollar debts, resulting in an accounting gain that also boosted the bottom line.

Global semiconductor companies are bracing for a shift in computing as more consumers and companies turn to mobile devices instead of desktop computers.

Fourth-quarter PC shipments declined by a wider-than-expected margin of 6.4 percent over a year earlier, according to market research firm IDC.

Microsoft's launch of its Windows 8 operating system at the end of last year did little to reverse the downward trend of PC demand, the research firm said.

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