[Courtesy of SK Hynix Inc.]
South Korea's SK Hynix on Tuesday reported a poor performance in the first quarter of this year due to falling microchip prices and weak demand for computers and mobile devices.
In the January-March period, net profit fell to 448 billion won (390 million US dollars) from 1.3 trillion won a year earlier, the company said.
Operating profit nosedived 65 percent on-year to 561.8 billion won, marking the lowest level since the first quarter of 2013. Sales fell 24 percent to 3.66 trillion won.
Slowing demand for computers and smartphones has continued to affect chip prices, the company said, predicting that demand for dynamic random memory chips (DRAMs) would remain weak in the second quarter.
There have been lingering concerns about a worldwide glut and stagnant demand in the microchip industry.
Nanya Technology president Lee Pei-ing has presented a gloomy forecast saying increased DRAM capacity may result in some pricing uncertainty in the second half of 2016.
For the second half, Lee expects demand for DRAM chips to be stronger than it was in the first half but market conditions are much less clear. The key to pricing is how quickly Samsung and other suppliers ramp up new capacity.
A price drop of 20-30 percent is possible, but if new capacity is ramped up quickly prices could drop 25-40 percent, he said.
Aju News Park Sae-jin = swatchsjp@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
