World’s No. 2 computer memory-chip supplier sanguine on global market
ICHEON, Gyeonggi ― Hynix Semiconductor on Wednesday said it will be doling out cash dividends for the first time this year and expected more to come on the back of rosier forecasts for the memory chip market.
“We expect the demand for memory chips to continue rising and as long as we continue to see profit exceeding our objectives, we hope to continue giving out cash dividends even though our basic rule is to re-invest (profit) because the semiconductor business requires intensive investment for enhancing corporate value,” said Kwon Oh-chul, the Hynix CEO, at a press conference following a shareholders’ meeting held at the company’s headquarters.
Hynix, the world’s No. 2 supplier of computer memory chips, last year registered record-high sales and operation profit.
Industry experts expect the chipmaker to record about 260 billion won ($233 million) of operating profit in the first quarter of this year, along with sales of around 2.8 trillion won.
Hynix shares yesterday ended at 31,550 won, up 550 won from Tuesday.
The CEO remained cautious of how global economic conditions would fare, but was overall sanguine on the memory chip market and its mid- and long-term prospects.
“This is an era marking the start of a second digitalization revolution that will be defined by mobile and smart devices. And as more IT devices are rolled out, the demand for memory also will surge,” Kwon said at the shareholders’ meeting.
He expected the memory demand for smartphones to rise by as much as four times the current demand.
As of this year, one-fifth of Korea’s population of 50 million used smartphones. Kwon, however, also warned of the changing market conditions, particularly involving competition with other rivals.
He noted that in the past, bolstering the memory chip business was mainly about the amount of funding, but that it is now about making strategic investments into developing new technologies and products.
“Our clients will increasingly be demanding higher quality products, and we need to satisfy these needs,” Kwon said.
Regarding the impact of the record earthquake in Japan, the CEO said it could take a toll if the situation is drawn out.
“If production disruptions at makers of personal computers and mobile devices are prolonged, it could have an effect on memory chip demand,” Kwon said, noting that most IT firms have up to about one or two months of reserves.
He added that although the market conditions for NAND memory ― an essential storage technology used for most IT products ― are expected to recover in the latter half of this year, they could still be affected negatively by the Japan factor.
By Kim Ji-hyun (email@example.com