SK Hynix Expects Soft Server Demand After Third Quarter Profit Surge: Report

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  • Chinese smartphone vendors were building up inventory to gain market share as Huawei faced U.S. restrictions
  • The company reported third-quarter operating profit of 1.3 trillion won ($1.2 billion), up from 473 billion won a year before

 

 As per a report by Reuters, SK Hynix said that it expected inventory build-up by Huawei’s competitors in China to boost mobile demand in the current quarter. It added that its mainstay server demand would remain week.

It added that the Chinese smartphone vendors were building up inventory to gain market share as Huawei faced U.S. restrictions. It further said that the market for server chips however would remain difficult until customers begin to stock up again later this quarter or early next year. As per the report, the earnings document showed that DRAM chips took up 72 per cent of SK Hynix’ total revenue in the third quarter, and about 40 per cent of that was server DRAM.

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Third-quarter operating profit of 1.3 trillion won

The company reported third-quarter operating profit of 1.3 trillion won ($1.2 billion), up from 473 billion won a year before. In October, SK Hynix and Intel announced that they have signed an agreement under which SK hynix would acquire Intel’s NAND memory and storage business for US $9 billion. The transaction includes the NAND SSD business, the NAND component and wafer business, and the Dalian NAND memory manufacturing facility in China. Intel will retain its distinct Intel Optane business.

As per the agreement, Intel will continue to manufacture NAND wafers at the Dalian Memory Manufacturing Facility and retain all IP related to the manufacture and design of NAND flash wafers until the final closing. SK hynix and Intel will endeavor to obtain required governmental approvals, expected in late 2021.

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