SK Hynix To Reduce Investments
Memory chipmaker SK hynix on Thursday unveiled plans to cut investment at chip facilities next year due to uncertain business outlook. "SK hynix's spending this year will be around 6 trillion won. There won't be any increase next year," the company said in a conference call to analysts and investors upon its third quarter earnings.
SK hynix has invested 5.3 trillion won so far, and reported that it spent most of this for the construction of the M14-manufacturing line in Icheon. The company has no plans to build any more new facilities any time soon.
Market leader Samsung Electronics is also expected to follow, as it wants to limit supply to increase profitability.
SK hynix reported 1.38 trillion won operating profit during the July-September period as its quarterly sales reached 4.92 trillion won; up 6 percent, and 14 percent from a year earlier.
The operating profit margin reached 28 percent, while the net profit margin remained at 21 percent.
SK hynix also plans to complete the development of 48-layer three-dimensional chips by this year.
SK hynix's global ranking in NANDs was fifth. The company is expected to be challenged in its key businesses after Western Digital bought SanDisk in a cash-and-stock deal worth about $19 billion. SanDisk is jointly operating NAND flash plants with Toshiba of Japan.
Also, Intel plans to invest up to $5.5 billion to shift non-memory chip facilities to memory chips in Dalian, China. The Chinese plant will introduce 3D NAND flashes from next year.