SK Hynix posts record third quarter profit on surging chip prices
SEOUL (Reuters) - South Korean memory chipmaker SK Hynix Inc (000660.KS) posted a record quarterly profit on Tuesday as a rally in computer memory chip prices helped cushion reduced output following a fire at its plant in China.
The fire last month at the Apple Inc (AAPL.O) supplier's plant has boosted pressure on computer memory chip prices, which have been rising since late last year due to a supply crunch as manufacturers switched to producing semiconductors for the booming market in mobile devices.
Earnings at Hynix, however, are seen dipping in the current quarter after two quarters of record profit, as a slow recovery at the fire-hit plant will crimp sales and see it miss out on an extended rally in the broader memory chip market, analysts said.
Hynix said on Tuesday it expected the DRAM chip market to continue to grow in the current quarter on increased demand for memory storage capacity from PC makers.
The world's second-biggest memory chipmaker reported 1.2 trillion won ($1.1 billion) in operating profit for July-September, above analysts' consensus forecast of 1.08 trillion won according to Thomson Reuters I/B/E/S.
The result was ahead of a 1.1 trillion won profit in the second quarter and a loss of 24 billion won a year ago.
Hynix, which competes with market leader Samsung Electronics Co Ltd (005930.KS) of South Korea, Japan's Toshiba Corp (6502.T) and U.S.-based Micron Technology Inc (MU.O), has yet to fully restore operations at the damaged Chinese plant, which produced around 15 percent of global computer memory chips before the blaze.
Average selling prices of Hynix's mainstay dynamic random access memory (DRAM) chips, used in computers, rose 5 percent in the third quarter due largely to tighter supply following the fire, offsetting a 2 percent drop in shipments.
Revenue for the quarter jumped 69 percent to a record 4.1 trillion won.
Shares in Hynix traded up 0.2 percent after the earnings announcement versus a 0.4 percent drop in the broader market .KS11.
(Reporting by Miyoung Kim; Editing by Stephen Coates and Richard Pullin)
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