* Q4 operating profit 785 bln won vs 780 bln won forecast
* Forecasts Q1 DRAM shipments up 20 pct q/q
* Shares up 2.1 pct vs 0.2 pct rise in KOSPI
SEOUL, Jan 28 South Korea's SK Hynix Inc
, the world's second-largest memory chipmaker, is
upbeat for sales in 2014 as its fire-hit factory in China
resumes full production this quarter and boosts shipments of
personal computer chips.
Dynamic random access memory (DRAM) shipments will rise
around 20 percent in the first quarter as the Wuxi plant returns
to pre-fire production levels following the blaze in September
which hit global supply of memory chips, the company said.
The plant made 15 percent of global DRAM semiconductors
before the fire and Hynix is hoping its recovery will help
cushion the impact of weakening chip prices and win back market
share from rivals like South Korea's Samsung Electronics Co Ltd
, Japan's Toshiba Corp and U.S.-based Micron
Many of Hynix's clients - which include PC makers Apple Inc
and Hewlett-Packard Co - are still short of
memory chips after the fire forced the company to sharply cut
shipments in the fourth quarter, ending two consecutive quarters
of record earnings.
"As operation of our Wuxi plant is normalised and will be
restored to pre-fire levels this quarter, we expect our DRAM
shipments would increase by around 20 percent in the first
quarter," Kim Joon-ho, SK Hynix head of business strategy, told
Looking ahead to the remainder of the year, he said chip
sales for PC and server products should continue to increase as
clients tried to build up inventory to make up for the generally
low levels following tight supply in the previous quarter.
Hynix reported 785 billion won ($724 million) in
October-December operating profit, broadly in line with
analysts' consensus forecast of 780 billion expected by Thomson
The result compares with a 55 billion won profit a year ago
and a record 1.16 trillion won profit in the previous quarter.
DRAM chip shipments fell 13 percent in the fourth quarter
from the previous quarter due to reduced output from the China
plant, outweighing a 1 percent increase in prices sparked by
concerns over tight supply.
Shares of Hynix traded up 2.1 percent versus a 0.2 percent
rise in the benchmark index. The stock has gained 8
percent over the past three months, beating a 5 percent drop in
the wider market.
Chipmakers like Hynix are battling to maintain earnings
growth as the PC industry shrinks and the booming mobile devices
Apple missed Wall Street's target for iPhone sales over the
crucial holiday shopping season and offered a
weaker-than-expected forecast for this quarter, underscoring
challenges smartphone makers are facing as a result of high-end
market saturation in many advanced economies.
Kim warned that demand growth from mobile devices would
ease, largely due to slowing growth of high-end products, but he
expected the PC sales slump to moderate thanks to a recovery in
Worldwide PC shipments fell 10 percent last year after
declining seven consecutive quarters, as smartphones and tablets
captured consumers' attention, according to researcher IDC.
Contract prices of DRAM chips, widely used in computers,
dropped 3 percent in the first half of January, according to
price tracker DRAMeXchange.com.
"DRAM prices are holding up relatively well in the current
quarter and the market is now even forecasting that the overall
DRAM industry would fare better than many had expected," Park
Nae-hak, vice president and head of DRAM marketing told
Park said that until late last year the global DRAM market
was expected to contract to $33 billion in 2014 from last year's
$35 billion, but now the market would now do better.