SK Hynix Q4 income eases on qtr, jumps 84% on yr, upbeat for 2021

(Updated with conference call comments)

SK Hynix Inc. is sanguine about the year dubbed to enter a new super cycle for memory chips, although uncertainties linger, after raking in more than 5 trillion ($4.5 billion) in income for full 2020.

The South Korean chipmaker disclosed Friday an operating profit of 965.9 billion won for the fourth quarter ended Dec 2020, down 25.7 percent from the previous quarter but quadrupled against a year-ago period. Revenue came at 7.97 trillion won, down 2.0 percent on quarter but up 15.0 percent on year. Its net profit was 1.7 trillion won, up 64 percent on quarter and reversed from 125.6 billion won loss of a year earlier.

The results were above analysts’ estimate of 881.4 billion won in operating income on sales of 7.5 trillion won, compiled by local financial data tracker FnGuide.

In full-year 2020, the company earned 5.0 trillion won income from operation, 84.3 percent higher on year. Revenue expanded 18.2 percent to 31.9 trillion won, and net profit more than doubled to 4.8 trillion won.

Profitability had eased due to softening in memory prices. The average selling price of DRAM fell 7 percent on quarter, and that of NAND flash 8 percent. The US dollar’s weakening also worked unfavorably for the chip exporter.

The chipmaker was upbeat about this year from pent-up memory demand for large servers and high-performance mobile chips amid restricted supply increases that can translate into strengthening in chip prices.

In the conference call, SK Hynix estimated server demand to grow 30 percent or more this year as data center expansion resumes. It also expected sharp growth in mobile chip demand, with shipment for 5G products doubled to 500 million units.

“Businesses have been accelerating digital transition, and this will serve as a growth momentum for memory chip demands,” said SK Hynix CFO Noh Jong-won.

The company, however, kept its capex plan modest at around 10 trillion won for this year. It is due to open M16 fab in Incheon next week, with mass production start scheduled for June.

In a separate disclosure, SK Hynix said it will make a cash dividend payout of 1,170 won per common share, or 800.2 billion won in total.

SK Hynix shares fell 0.41 percent to close Friday at 122,500 won.

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