SK Hynix sinks to loss on oversupply, weak demand

Jul 26, 2012 by YOUKYUNG LEE

(AP) — SK Hynix Co., which supplies mobile chips to Apple Inc., sank to a quarterly loss as oversupply battered mobile chip prices while demand for personal computers weakened.

SK Hynix said Thursday its net loss totaled 53 billion won ($46 million) in the April-June period on revenue of 2.6 trillion won.

The South Korean chipmaker posted a small operating profit for the first time in one year but its 23 billion won operating income was just 5 percent of 447 billion won operating income a year earlier.

The quarterly results reflect the challenges facing Asian chipmakers. Global demand for smartphones has not been as strong as chipmakers' overly upbeat estimates and a slowing global economy has clouded the outlook for the personal computer market.

Hynix blamed a steep drop in prices of NAND , which goes into smartphones and tablet computers.

As global chipmakers raced to increase output of flash memory, prices of NAND flash chips tumbled nearly 20 percent in the second quarter. Japan's Toshiba Corp. said earlier this week it would slash output of flash memory to better cope with oversupply and the price plunge.

The decline in flash memory prices offset a marginal price recovery in memory chips used in personal computers, which have remained at a rock bottom for more than a year.

Analysts have recently downgraded their outlook for Hynix after industry bellwether Intel Corp. cut its revenue forecast, signaling weak PC sales for the rest of the year.

Hynix, which is the world's second-largest memory chipmaker after Samsung Electronics Co., gets around 40 percent of its dynamic random access memory chip revenue from global PC makers including Dell Inc. and Hewlett-Packard Co.

Even as worries persist that the weak global economy will weigh down consumer and corporate spending on technology products, Hynix said memory chip market conditions will likely improve over the rest of the year as chipmakers reduce output and demand picks up.

Upcoming launches of new laptop computers, timed for the release of Google's new Nexus 7 operating system, other tablet PC launches and new smartphones such as Apple's next iPhone could lift demand, according to Hynix and market analysts.

Explore further: US newspaper industry revenue fell 2.6 pct in 2013

5 /5 (1 vote)
add to favorites email to friend print save as pdf

Related Stories

S. Korea's Hynix swings to red in Q4 on poor demand

Feb 02, 2012

South Korea's Hynix Semiconductor, the world's second-largest maker of memory chips, said Thursday it swung into the red in the fourth quarter as chip prices fell on weak demand for personal computers.

South Korea's Hynix swings to net loss in Q3

Oct 27, 2011

South Korea's Hynix Semiconductor, the world's second-largest memory chip maker, said Thursday it swung to a third-quarter net loss as weak demand for personal computers dampened sales.

S.Korea's Hynix notches record sales

Apr 22, 2010

South Korea's Hynix Semiconductor said Thursday it posted record quarterly sales in the three months to March on the back of strong demand, achieving a third straight quarter in the black.

Hynix turns 2Q net profit amid record sales

Jul 22, 2010

(AP) -- Hynix Semiconductor turned a net profit in the second quarter after a loss the year before as sales rose to a record and prices for its mainstay computer memory chips increased.

Hynix Semiconductor 1Q profit falls 66 percent

Apr 28, 2011

(AP) -- Hynix Semiconductor's quarterly profit fell 66 percent as sales declined and memory chip prices remained weak, though the company said business conditions should improve in the second quarter.

Recommended for you

Ex-Apple chief plans mobile phone for India

59 minutes ago

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

14 hours ago

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

US venture investments highest since 2001 (Update)

Apr 18, 2014

Funding for U.S. startup companies soared 57 percent in the first quarter to a level not seen since 2001, as venture capitalists piled more money into a growing number of deals, according to a report due out Friday.

User comments : 0

More news stories

Ex-Apple chief plans mobile phone for India

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

Health care site flagged in Heartbleed review

People with accounts on the enrollment website for President Barack Obama's signature health care law are being told to change their passwords following an administration-wide review of the government's vulnerability to the ...

NASA's space station Robonaut finally getting legs

Robonaut, the first out-of-this-world humanoid, is finally getting its space legs. For three years, Robonaut has had to manage from the waist up. This new pair of legs means the experimental robot—now stuck ...

Filipino tests negative for Middle East virus

A Filipino nurse who tested positive for the Middle East virus has been found free of infection in a subsequent examination after he returned home, Philippine health officials said Saturday.

Egypt archaeologists find ancient writer's tomb

Egypt's minister of antiquities says a team of Spanish archaeologists has discovered two tombs in the southern part of the country, one of them belonging to a writer and containing a trove of artifacts including reed pens ...