SK Hynix issued optimistic outlooks for the global semiconductor market for the year ahead: a 20 percent surge in DRAMs and a 40 percent jump in NAND flash memory demand.
SK Hynix is forecast to set aside more than 10 trillion won in facility investments for this year, the company said.
SK Hynix Senior Executive Vice President Lee Myung-young in charge of management support said the size of facility investments for 2018 is yet be determined to reflect product demand and market changes.
But he predicted that facility investments will rise this year since investments in construction and infrastructure are to be made, including the construction of the new M15 line of the semiconductor plant in Cheongju and the expanding of a plant in Wuxi, Jiangsu Province, China.
SK Hynix posted 9,0276 billion won in sales, 4,465.8 billion won in operating profit, and 3.21 billion won in net profit in the fourth quarter of 2017, achieving the Triple Crown of the best-ever performance in sales, operating profit and net profit on a quarterly basis.
SK Hynix’s rate of operating profit out of sales stood at 49 percent, approaching the manufacturing sector’s coveted 50 percent.
The reason is that semiconductor prices have surged due to a jump in memory demand, with a focus on chips for services following the growth of internet data centers and limited supply.
SK Hynix Senior Executive Vice President Lee said the company plans to advance by a few months the dedication of the M15 line in Cheongju and the installation of equipment, which were originally scheduled for this year-end and early next year, respectively.
Despite the advancing of the dedication, the new chip line will launch production after 2019, he said. The expansion of the Wuxi plant is to be completed this year-end as planned.
The fab yield of the state-of-the-art 72-layer 3D NAND plash memory production will be getting stabilized, Lee said. He went on to say that flash memory shipments for mobile solid state drives will be sold in earnest in the upcoming second half to become a mainstay chip. 3D NAND plash memories accounted for more than 50 percent of all NAND flash memory shipments, and the 72-layer 3D NAND plash memory will likely top 50 percent of 3D NAND flash memories, to be sold during this year.
The company has established a plan to surge DRAM shipments by 20 percent and to predict the growth of the NAND flash memory market by 40 percent this year, compared to the previous year. SK Hynix has decided to focus on the raising of the fab yield instead of the construction of new plants and plant expansion.
SK Hynix issued optimistic outlooks for the global semiconductor market for the year 2018: a 20 percent surge in DRAMs and a 40 percent jump in NAND flash memory demand. The company had a management crisis in 2016 when forecasts came in that the global chip market would decline by 10 percent across the board that year.
Average DRAM sale unit prices had already dropped 10.6 percent in the 4th quarter of 2015. Factors in the market went the opposite way, however.
The size of the global DRAM market jumped to $72.2 billion last year, a 73.6 percent surge over 2016. The figure was more than $26.3 billion predicted for the 4th quarter of 2016. At that time, experts failed to predict that the demand for servers in use for AI and big data would see explosive growth.
On Jan. 25 when SK Hynix’s performance was announced, chip experts and investment analysts focused their attention to the company’s management conference call rather than its business performance. The focal point was a look into how SK Hynix would foresee the global chip market this year. Starting the 4th quarter of last year, some experts began to forecast that the global memory market will likely decline after hitting a peak in this year.
However, SK Hynix issued the prediction saying that the demand for DRAMs and NAND flash memory chips will see a solid increase.
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