SK Hynix Operating Profit Falls as Memory Chip Prices Slideby
Average selling prices for benchmark chips have almost halved
Shares drop after net income slumps on foreign exchange loss
SK Hynix Inc., a supplier of memory chips to Apple Inc., posted a slump in second-quarter profit as semiconductor prices dropped on slack demand for smartphones and personal computers.
Operating income fell 67 percent to 452.9 billion won ($398 million) in the three months ended June, the Icheon, South Korea-based company said. That compares with the 454.3 billion-won average of analyst estimates compiled by Bloomberg. Shares fell.
Deteriorating demand for smartphones saw the average selling price of benchmark DDR3 4-gigabit dynamic random access chips drop to $1.58 in the quarter, 47 percent below the year earlier, according to InSpectrum Tech Inc. SK Hynix said Tuesday that demand for DRAM chips will surge in the current quarter, driven by new mobiles. Apple, Hynix’s biggest customer, typically releases new iPhones in September.
“Rebounding demand is the biggest issue now and the continued fall in the chip prices have reflected that missing demand,” Song Myung Sup, a Seoul-based analyst at HI Investment& Securities Co., said before the announcement.
Shares of SK Hynix dropped 3.2 percent to 31,450 won as of 9:13 a.m. in Seoul, paring this year’s gain to 2.3 percent. The stock slid 36 percent in 2015.
Apple accounts for more than 9 percent of SK Hynix’s revenue, according to data compiled by Bloomberg.
Net income excluding minority interest slumped 74 percent to 286 billion won after a loss in foreign exchange, the company said. Sales for the quarter were 3.94 trillion won.