SEOUL, South Korea (AP) — SK Hynix Inc. said Tuesday its first-quarter net profit has surged 64 percent over a year earlier thanks to robust memory chip prices that offset slowing growth in the mobile sector.
The South Korean chipmaker, which supplies to Apple, reported 3.1 trillion won ($2.9 billion) earnings for the January-March period, compared with 1.9 trillion won a year earlier.
The result missed market consensus of 3.3 trillion won, according to FactSet, a financial data provider.
Sales rose 39 percent to 8.7 trillion won ($8.1 billion) while operating income jumped 77 percent to 4.4 trillion won ($4.1 billion).
SK Hynix, the world's second-largest memory chipmaker after Samsung Electronics, said prices of memory chip devices called DRAM continued to show solid growth as demand for chips used in servers and data centers expanded. But another type of memory chip devices called NAND flash saw a slight drop in its prices and lower shipments as the mobile sector saw weak sales.
Going forward, the company forecast a continued supply shortage of DRAM, even as global DRAM makers step up their productions. DRAM chips help servers and computers run multiple programs faster.
The growth of DRAM demand will be driven mainly by global internet data centers, which are expected to expand investments, SK Hynix said.
Demand for DRAM chips from mobile manufacturers including Apple and Samsung will be soft because of slowing growth in the smartphone sector, it said. But SK Hynix said there is a bright spot in the mobile DRAM chip market. With more mobile phone makers adding more sophisticated features to lure consumers, such as artificial intelligence and smarter cameras in their handsets, each phone must be equipped with larger DRAM chips to handle a bigger amount data and programs in a given time.