(iTers News) - Mainly powered by strong seasonality, SK Hynix Inc. swung back to profitability in the fourth quarter ended on Dec. 31, 2012. The world’s second largest memory chip maker chalked up an operating profit of 55 billion won on revenue of 2.72 trillion won, up from 12% from the previous quarter.

The fourth quarter operating profit marks a major turnaround from an operating loss of 24 billion won in the previous quarter. The fourth quarter net income was 164 billion won, a whopping gain from 2 billion won in the previous quarter. The strong Korean won currency helps the chip maker to reduce the interest payments on the dollar-denominated debt.

(O.C.Kwon / President & CEO / SK Hynix Inc./ Seoul/2013/01/30)



The main contributor to the fourth quarter profitability was its well-balanced product mix-up strategy, which helped the chip maker to offset price collapses in commodity-like PC memory chips with strong sales of premium high-end mobile, graphics- server-bound DRAM chips. Quarter-over-quarter, DRAM bit shipment increased 28% but the average selling price declined 10%. For NAND Flash, the bit shipment increased 19% and the average selling price also rose 6%.

During the quarter, DRAM bit shipment dramatically increased due to strong demand of the mobile and server products and increased sales of low-price tablets in emerging markets, yet sluggish sales of commodity-like PC DRAM chips heavily weighed on average selling price of DRAM chips. Yet, soaring sales of mobile DRAM chips, which represented 40% of SK Hynix’s DRAM sales, helped minimize the impact of a drop in the price of PC DRAM. Also, the yield improvement of 20nm class DRAM contributed to raise the profitability.

For NAND Flash, the bit shipment increased due to release of brand-new smartphones, tablets and growth of smartphone market in China. Also, limited supply by manufacturers and the sales of the solution products which accounted for more than 87% of total NAND Flash units contributed to the profitability. For all of fiscal 2012, however, SK Hynix reversed the 369 billion operating loss in the fiscal 2011, racking up an operating loss of 227 million on revenue of 10.2 trillion, a 2% drop from 10.4 trillion won of 2011.

SK Hynix will enhance its technology competitiveness by starting the mass production of 20nm class mobile DRAM and completing the development of 10nm class NAND Flash in the first half as well as completing the development of 3D NAND Flash within the year. Particularly, it will improve its competitiveness by increasing the proportion of mobile products. It includes growth in the portion of mobile DRAM expected to become a main item in unit sales of DRAM this year and eMMC with increasing demand of mobile IT applications.

Photos & Videos by JH Bae



 

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