SK Hynix Q4 operating profit drops 41% on weak memory chip demands

By Park Sae-jin Posted : January 26, 2016, 12:59 Updated : January 26, 2016, 12:59

[Courtesy of SK Group]

South Korean semiconductor maker SK Hynix said Tuesday it booked operating profit of 989 billion won ($825.33 million) in the fourth quarter, a 41 percent drop from a year earlier, on weaker global chip demand for its products. .

It is the first time for SK Hynix to post a quarterly operating profit that fell below the 1-trillion won mark since the January-March period of 2014.

The company had been enjoying robust operating profits on the back of favorable memory chip prices. But the average price of DRAMs and NAND flash decreased 10 percent and 15 percent, respectively, on-quarter in the October-December period, the company said.

Q4 Sales dropped 14% on-year to 4.42 trillion won while Q4 net profit fell 46% to 871 billion won.

Despite the large drop in profits, shares in Hynix made a modest gain Tuesday as the figures were in line with market expectations.

The company said sales growth in its dynamic random access memory (DRAM) chips was “slightly less than planned as mobile device demand slowed during the quarter.”

For the whole 2015, sales rose 10 percent to a record high 18.79 trillion won and net profit gained 3% to 4.32 trillion won.

The company said its sales of memory chips will likely remain flat in the first quarter due to the falling seasonal demand.

By Alex Lee
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