South Korea's No. 2 chipmaker SK hynix Inc. saw its third-quarter net profit soar 53.6 percent from a year earlier, as the company continued to expand its shipment of memory chips to offset the sluggish global selling prices.
The company's net came to a record 4.69 trillion won (US$4.13 billion) in the July-September period, up from 3 trillion won posted a year earlier, SK hynix said in its regulatory filing.
Operating profit moved up 73.2 percent over the cited period to 6.47 trillion won, also posting an all-time high.
Sales shot up 40.9 percent on-year in the third quarter to reach a record 11.4 trillion won, the company added.
The third-quarter operating profit was slightly above the market's estimate of 6.31 trillion won, compiled by Yonhap Infomax, the financial arm of Yonhap News Agency, on 22 local brokerage houses. The outlook on sales stood at 11.8 trillion won.
SK hynix said its performance also improved from the previous quarter despite the falling price of NAND flash products coupled with a slower increase in DRAM prices as it expanded its shipment volume.
The company said its shipment of DRAM products moved up 5 percent on-quarter on the back of the strong seasonal mobile product demand. The average sales price increased 1 percent over the period.
In terms of NAND flash products, SK hynix said the shipments increased 19 percent on-quarter as the presence of solid-state drives (SSD) in its portfolio expanded. The average selling price, however, fell 10 percent.
For the third quarter, SK hynix said SSD accounted for 20 percent of the sales from the NAND flash business, helped by growth in demand from enterprises. Sales of enterprise SSDs tripled on-quarter to account for one-fifth of the combined revenue from SSD products.
Concerning the upcoming market forecast for DRAM products, SK hynix said there will be uncertainties due to the intensifying tension over trade around the globe and eased supply shortages.
The demand for its products, however, is anticipated to remain solid as the industry calls for the adoption of high-capacity chips amid the development of new technologies, including artificial intelligence, SK hynix said.
The mobile segment is also set to maintain sound performance as more smartphones are adopting high-end features, such as triple-lens cameras, which are also being installed on budget models.
As for NAND flash, SK hynix said the average prices are expected to lose ground for the time being due to accumulating inventories among chipmakers, but the demand will continue to rise on demand for products with higher capacities.
SK hynix said the demand for enterprise SSDs will especially continue to post growth, with the shipments of mobile products gaining ground on the back of the Chinese market.
"SK hynix plans to actively respond to market changes through the development of new processes, as well as stable operations of mass production facilities," the company said.
Shares of SK hynix closed at 66,700 won Wednesday, down 3.47 percent from the previous session. The third-quarter report was announced before the market opened on Oct. 25, 2018. (Yonhap)