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SK Hynix expect chip demand to remain volatile during the pandemic

SK Hynix
In the first quarter, the company reported operating profit of 800 bn won

World’s largest chipmaker SK Hynix has warned the industry that chips demand will remain volatile during the coronavirus pandemic. The company has noted that if the current situation prolongs, it could adversely affect production, sales, and product development in South Korea.

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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