SK Hynix is a South Korean supplier of dynamic random-access memory chips and flash memory chips. Apple is one of the chipmaker’s major customers, media reports said. In the first quarter, the company reported an operating profit of 800 billion won. It is reported that the figures are higher than Refinitiv SmartEstimate of 474 billion won.

Cha Jin Seok, SK Hynix’s chief financial officer, told reporters, “There are a lot of uncertainties about the outlook for supply and prices for servers in the second half. The biggest factor to our demand forecast is the stabilisation of COVID-19 and the recovery timing of global economic activity. If the economic recession is prolonged, we can’t rule out that even memory demand for servers could slow down.”

It is reported that SK Hynix’s DRAM chips shipment has plateaued from the previous quarter to the current quarter. These chips are used in smartphones, PCs and servers. It seems that the company will see a huge impact on mobile phones despite huge server demand.

Park Sung-soon, an analyst at Cape Investment & Securities, told the media, “ts forecast is lower than the market expected, and SK Hynix will see a bigger impact from coronavirus impact on mobile phones, despite robust server demand.”

The global smartphone market is anticipated to witness a steep decline in 2020 compared to 2019, media reports said. However, SK Hynix has a positive outlook because of greater server demand during the pandemic.

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Toshiba made the decision at a board meeting to sell Toshiba Memory Corp. to the consortium led by US fund Bain Capital that it had signed a memorandum with last week to speed up talks on the sale. Toshiba will negotiate exclusively with the group to quickly seal a deal.

The consortium also includes the state-backed Innovation Network Corp. of Japan, the Development Bank of Japan, South Korean chipmaker SK Hynix Inc. and four U.S. technology firms — Apple Inc., Dell Inc., memory product maker Kingston Technology Corp. and data storage company Seagate Technology.

Toshiba is selling Toshiba Memory to make up for the huge losses stemming from its now-bankrupt U.S. nuclear unit by next March and avoid reporting negative net worth for a second straight year that would see it face delisting from the Tokyo Stock Exchange.

The decision comes after board members also considered a revised offer made at the last minute by a group led by Western Digital, which jointly invests in Toshiba’s Yokkaichi flash memory plant.

While some board members had apparently expressed support for Western Digital’s proposal, it was eventually rejected as many in the company could not overcome their distrust of the U.S. firm following a legal dispute between the two companies over the sale of the chip unit, sources said.

Ties between the two companies had soured after Western Digital took Toshiba to court claiming that the unit’s sale without its consent would breach their joint venture contract.

The main focus of talks between Toshiba and the Japan-U.S.-South Korea group had been how to handle the legal challenges posed by Western Digital.

In its offer, the group said that Bain Capital and SK Hynix would shoulder costs to settle the legal dispute with its longtime partner, the sources said.

The consortium and Toshiba also agreed to keep the ratio of SK Hynix’s voting rights low in the chip unit in the future in order to avoid antitrust issues.

The group also made a proposal that the INCJ and DBJ would invest in Toshiba Memory once the legal dispute is resolved, while Bain Capital and others in the group would pay for the investment by the two Japanese entities.

But Toshiba still needs to figure out ways to quickly reach a settlement with Western Digital, as the sale could still be blocked if the legal spat continues.

In its last-minute offer, the Western Digital-led group said it will give up seeking voting rights in the chip unit after initially demanding more than one-third of the rights to gain veto power, the sources said.

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