Photographer: SeongJoon Cho/Bloomberg

SK Hynix to Spend $2.6 Billion Boosting Chip Output for Mobile

  • Prices have risen as mobile, computer storage demand climbs
  • The company’s shares climbed in morning trade in Seoul

SK Hynix Inc., the world’s second-largest memory chipmaker, will spend 3.16 trillion won ($2.6 billion) boosting production to meet growing demand for mobile and computer storage.

The supplier to Apple Inc. and Sony Corp. said Thursday it will invest 2.21 trillion won on a new plant in Cheongju, south of Seoul, to meet increasing demand for the NAND flash chips used in smartphones. It will spend another 950 billion won on its plant in Wuxi, China to raise capacity for dynamic random access memory or DRAM chips. Last year, the chipmaker said it will invest a total of 46 trillion won in boosting chip production.

Hynix’s shares rose 3.2 percent to 46,450 won as of 9:54 a.m. in Seoul.

Prices for chips have risen sharply with growing demand for faster processing power and bigger storage in mobile devices and computers. The new plant begins construction from August and will be completed by June 2019, the Icheon, South Korea-based company said in a statement. DRAM chips are used in mobile and computers to help run multiple programs simultaneously, while NAND is needed in smartphones and tablet computers for functions from playing videos and multitasking to storing books and photographs.

Hynix reported a 43.1 percent drop in net income in the third quarter but the persistent rise in chip prices, with demand outstripping supply, is boosting expectations for sharply improved earnings in the fourth quarter, Kiwoom Securities Co. said in a Dec. 14 report.

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