SK Hynix sees rising demand for chips as quarterly profit surges - Reuters

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The logo of SK Hynix is seen at its headquarters in Seongnam, South Korea, April 25, 2016. REUTERS/Kim Hong-Ji

SEOUL, Oct 26 (Reuters) - SK Hynix (000660.KS) forecast steady growth in demand for memory chips on Tuesday as it posted its highest quarterly operating profit since 2018 on the back of rising prices which offset slowing personal computer sales as COVID-19 lockdowns eased.

"Despite the concerns over recent global supply chain disruptions," the chipmaker's third-quarter performance "signals that the semiconductor memory industry is continuing its growth momentum," SK Hynix CFO Kevin Noh said in a statement.

The world's second-biggest memory chipmaker, which serves customers including Apple Inc (AAPL.O), said 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.

That was its highest quarterly profit since the fourth quarter of 2018, and slightly beat a Refinitiv Smartestimate of a 4.1 trillion won based on polling from 18 analysts. The Smartestimate gives more weight to consistently accurate analysts.

Third quarter revenue rose 45% on-year to a record 11.8 trillion won.

SK Hynix shares fell as much as 24% between end-2020 and mid-October as memory chip prices were expected to peak. The share price has recovered slightly in recent days.

"There was a rush among investors to reduce the portion of memory chip makers because the cyclical downturn experienced after 2018 remains a bad memory," Greg Roh, head of research at Hyundai Motor Securities, said.

($1 = 1,177.2300 won)

Reporting by Joyce Lee and Heekyong Yang; Editing by Shri Navaratnam and Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

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