By Joyce Lee and Heekyong Yang
SEOUL -SK Hynix forecast steady demand for memory chips on Tuesday as it posted its highest quarterly operating profit in nearly three years on the back of rising prices, striking a more bullish note than rivals including Micron.
SK Hynix and other other chipmakers have been hit by slowing personal computer sales after a pandemic-led surge, but the South Korean company said supply bottlenecks had created pent-up demand for PC chips that could boost sales next year.
“There have been a lot of uncertainties recently, but I think memory is still doing business at a level that provides good supply and predictability compared to other semiconductors,” SK Hynix’s chief financial officer, Kevin Noh, told an earnings call.
Intel said earlier this month shortages of other chips were stopping its customers from shipping PCs and servers, echoing comments from Micron.
Corporate demand and changing hybrid working environments would also underpin PC chip demand, said SK Hynix, which trails only Samsung Electronics Co Ltd in DRAM chips used for temporary storage in PCs, servers and mobile devices.
An expected replacement cycle of equipment bought by data centres during 2017-2018 will create demand for server chips, Hynix added.
SK Hynix shares rose 3% on Tuesday compared with a 0.6% rise in the wider market.
Operating profit rose to 4.2 trillion won ($3.6 billion) in the July-September quarter, up from 1.3 trillion won a year earlier, SK Hynix said.
That was its highest quarterly profit since the fourth quarter of 2018, and above a Refinitiv Smartestimate of 4.1 trillion won from 18 analysts.
The Apple Inc supplier’s NAND business turned profitable for the first time since the fourth quarter of 2018, analysts said. NAND chips are used for permanent storage in mobile devices and servers.
SK Hynix said it expected Chinese regulators to approve its deal to buy Intel’s NAND business this year.
Analysts said the company had improved the yield of its 128-layer NAND flash chips that serve the data storage market, which would propel shipments.
SK Hynix said third-quarter revenue rose 45% on-year to a record 11.8 trillion won.
($1 = 1,177.2300 won)
(Reporting by Joyce Lee and Heekyong Yang; Editing by Stephen Coates and Sayantani Ghosh)