SK Hynix: Fiscal 1Q14 Financial Results

SK Hynix Inc. announced financial results for its first quarter 2014 ended March 31, 2014.

Despite seasonal weak demand of mobile devices and depressed NAND flash market, the consolidated first quarter revenue was 3.74 trillion won risen 11% from 3.37 trillion won of the previous quarter.

It was thanks to increased DRAM sales owing to fully recovered Wuxi fab and favorable DRAM prices.

Operating profit totaled 1.06 trillion won with operating margin of 28% increased 35% from 785 billion won of the previous quarter. It went over 1 trillion won again after 1.16 trillion won of the third quarter 2013.

Net income for the quarter amounted to 802 billion won with net margin of 21%, which was negatively impacted by net foreign currency due to weak South Korean won.

In summary, the results surpassed market forecasts while exceeding those of the previous quarter and the same period of last year in all the sectors.

Quarter-over-quarter, DRAM bit shipment increased 20% and the ASP remained stable. The shipment increased thanks to normalized Wuxi fab and the ASP stabilized due to increased demand from clients who wanted to secure stable inventory level.

For NAND flash, the bit shipment and the ASP dropped 8% and 14% respectively. Both declined as the demand was weak due to seasonal effect.

SK Hynix will mass produce 2Ynm PC and server DRAM products in a full-scale from the second quarter and apply this process technology to its mobile DRAM in the second half. Plus, the company will increase the proportion of mobile DRAM production to catch up with demand recovery of mobile devices.

For NAND flash, the company is to expand the proportion of 1Xnm to focus on improving productivity and production cost and will supply samples of TLC and 3D products after completing the development of those within this year.