The world’s second-biggest reminiscence chipmaker, South Korea’s SK Hynix, posted fourth-quarter revenue effectively beneath market expectations on Thursday as US-China commerce frictions and China’s slowing financial system dragged on semiconductor costs.
It was the Samsung Electronics rival and Apple provider’s first revenue decline in two years, however its shares rebounded from latest falls because of hopes the worldwide chip market is nearing the underside, analysts mentioned.
“Sharp declines in Chinese language demand for digital merchandise are materialising and Hynix’s outcomes are exhibiting that,” mentioned Tune Myung-sup, a senior analyst at HI Funding & Securities.
SK Hynix mentioned its October-December revenue was KRW four.four trillion ($three.9 billion), beneath a KRW 5.1 trillion common forecast drawn from 26 analysts, in line with Refinitiv information.
“Rising macroeconomic uncertainties led to conservative buying behaviour by server prospects and a slowdown in smartphone gross sales,” the corporate mentioned in its presentation slides for the outcomes.
SK Hynix plans to chop its funding in tools purchases by 40 % this 12 months versus a 12 months earlier, because of China’s financial slowdown and the US-China commerce “state of affairs”, an organization government advised the earnings name.
Market chief Samsung earlier this month estimated a 29 % drop in quarterly revenue, blaming weak chip demand. This adopted Apple’s reduce to its quarterly gross sales forecast citing slowing iPhone gross sales in China.
Taiwan Semiconductor Manufacturing Co (TSMC) joined in final week, forecasting its sharpest quarterly income fall in a decade.
China’s financial system cooled within the fourth quarter beneath stress from faltering home demand and US tariffs, weighing on income for companies starting from tech giants to massive carmakers.
On the upside, SK Hynix mentioned demand for server DRAM chips, which assist gadgets carry out a number of duties, ought to get better within the second half as information centres diminished stock from presently excessive ranges.
SK Hynix mentioned its DRAM chip shipments fell by 2 % within the fourth quarter, whereas its promoting costs slid 11 % from 1 / 4 in the past.
For NAND flash chips, which offer long-term information storage, shipments rose by 10 % however the common promoting value fell by 21 %, the corporate mentioned.
© Thomson Reuters 2019