SK Hynix sees supply chain issues improving in second half, more chip demand

The logo of SK Hynix is ​​seen in Seongnam, South Korea April 25, 2016. REUTERS/Kim Hong-Ji

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SEOUL, Jan 28 (Reuters) – South Korean chipmaker SK Hynix Inc (000660.KS) said it expects supply chain issues to gradually improve from the second half of the year. and as demand for memory chips increases, after quadrupling the year-over-year increase in operating profit in the fourth quarter.

The world’s second-largest memory chipmaker has joined other tech companies, including biggest rival Samsung Electronics Co Ltd (005930.KS), in slowing chip demand growth associated with ongoing chain issues supply in 2022, when he predicted strong demand for memory chips from data centers and other servers. clients.

“The long-term outlook for high-performance memory products, including server products…is very positive,” SK Hynix said during an earnings briefing on Friday.

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“Demand is increasing due to factors such as the exploration of non-face-to-face infrastructure construction, the spread of AI (artificial intelligence) machine learning, and the emergence of NFTs (non-fungible tokens). ) and metaverse as new apps.”

In NAND flash memory chips that serve the data storage market, SK Hynix last month completed the first phase of its acquisition of Intel Corp’s NAND business. With the acquisition, SK Hynix expects NAND flash sales to double this year compared to last year, it said on Friday. Read more

For DRAM chips that are widely used in data centers and technology devices, SK Hynix said Friday it plans to manage inventory flexibly while focusing on profitability in 2022.

SK Hynix said capital spending in 2022 will increase from 2021’s 13.4 trillion won ($11.12 billion), mainly due to large construction and infrastructure investments, such as the purchase of a future chip factory site in South Korea and a research and development center in the United States. states.

In a regulatory filing released on Friday, it said it would invest about 2.4 trillion won in Wuxi, China, where it has a chip factory, as part of ordinary investments for business operations, with additional investments in production facilities.

Shares of SK Hynix rose 6.6% vs. 1.4% in the broader market (.KS11) after the chipmaker announced a 2022-2024 shareholder return policy that involved raising fixed dividends of 20% and to use approximately 50% of the newly generated free cash flow. for returns to shareholders.

The chipmaker, whose clients include Apple Inc (AAPL.O), reported profit of 4.2 trillion won in October-December, its highest quarterly profit since 2018 and up from 959 billion wons a year earlier.

Revenue soared 55% to a record 12.4 trillion won.

($1 = 1,204.8900 won)

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Reporting by Joyce Lee and Heekyong Yang; Editing by Diane Craft and Christopher Cushing

Our standards: The Thomson Reuters Trust Principles.

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