SK hynix posts 6.3 % increase in Q1 sales despite global pandemic

By Lim Chang-won Posted : April 23, 2020, 10:53 Updated : April 23, 2020, 10:53

[Courtesy of SK hynix]

SEOUL -- SK hynix, the second-largest memory chip producer in South Korea, posted a 6.3 percent increase in first-quarter sales, helped by strong demand for server chips, improved yields and reduced costs despite a coronavirus pandemic that has caused rapid changes in the global business environment.

The company said that its net profit was down 41.1 percent on-year to 649.1 billion won ($525.6 million) in the January-March period. First-quarter operating profit fell 41.4 percent to 800.3 billion won while sales rose 6.3 percent to 7.19 trillion won.

Although global smartphone sales are expected to decrease, server memory sales are expected to grow, SK hynix said, adding the outlook for the global memory market is uncertain due to a prolonged pandemic that would increase demand volatility.

"We are making every effort to minimize risks from COVID-19 and to prepare for technological innovation and infrastructure so that we can respond in a timely manner when 5G and server-oriented growth momentum comes in the future," chief financial officer Cha Jin-seok said in a statement.

SK hynix posted 236 billion won in operating profit in the fourth quarter of 2019 due to falling chip prices. In the first quarter, the company said that reduced demand for mobile customers was offset by strong server-oriented demand.

NAND Flash also saw its shipments rise 12 percent on-quarter as demand for solid-state drives (SSDs) for servers increased, while average sales prices rose 7 percent.

SK hynix said it would actively respond to demands for high-capacity server modules and improve profitability by expanding sales of 10-nano second-generation mobile DRAMs. It also plans to start mass-producing 10-nano third-generation products in the second half of this year.
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Lim Chang-won Reporter
Lim Chang-won

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