SK hynix will beat its fourth-quarter earnings estimate despite the stronger won, but its profitability momentum will slow down because of declining memory prices this year, Korea Investment and Securities said Jan. 3.

Demand for DRAM is weak except for in servers, and difficulties in supply will gradually be resolved next year as investment in manufacturing facilities increase, said analyst Yoo Jong-woo. Demand for NAND, including mobile and SSD memory, is declining as well, and suppliers’ conversion to 3D NAND manufacturing processes will stabilize and the price will fall, noted the analyst. 

The company’s revenue in the fourth quarter last year will rise 11 percent from the previous quarter to 9 trillion won and operating profit 17 percent to 4.37 trillion won, Yoo said.

Price increases for DRAM and NAND more than offset the negative effect of the strong won, and in 2017 supply could not keep up with demand, as the memory industry had difficulty in switching processes, but this will be resolved this year, he added.

By: DocMemory
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