SK Hynix Inc., a supplier of memory chips to Apple Inc., posted third-quarter profit that beat analysts’ estimates as increased demand and reduced inventories fed a rally in semiconductor prices.

Operating income was 726 billion won ($642 million) in the three months ended September, the Icheon, South Korea-based company said Tuesday. That compares with the 660.4 billion-won average of estimates compiled by Bloomberg.

While SK Hynix is tapping into rising demand for memory in mobile devices and personal computers, it’s being helped by buoyant prices as manufacturers limit production increases. Apple, Hynix’s biggest customer, released new iPhones last month and Chinese vendors are adding premium components to stimulate sales.

“Temporary peak in demand isn’t really important. The important thing is how slowly and gradually the supply goes up,” said Kim Kyung-min, an analyst at Daishin Securities Co. “I think next year’s outlook is also pretty good.”

The company’s shares rose 1.6 percent to 40,800 won as of 11:28 a.m. in Seoul, extending this year’s advance to 33 percent. The stock slid 36 percent in 2015.

Apple provides about 8 percent of Hynix sales, according to data compiled by Bloomberg.

Prices of benchmark DDR3 4-Gb dynamic random access chips rose to $2.01 as of Sept. 30 compared with $1.73 a quarter earlier, according to InSpectrum Tech Inc. The flash NAND market will sustain a positive trend, company said.

Hynix posted net income of 596.8 billion won, beating estimates of 498.1 billion won.

By: DocMemory
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