Owing to higher market prices of memory chips, SK hynix, the world’s second-largest DRAM producer achieved record operating profit in the first quarter of this year, the company announced Tuesday.

SK hynix posted 6.29 trillion won ($5.57 billion) in revenue on a consolidated basis for the January-March period, with 2.47 trillion won in operating profit and 1.9 trillion won in net income. The operating margin for the quarter was 39 percent and net margin was 30 percent, it said. 

Compared to the previous quarter, the revenue rose 17 percent, while the operating profit surged 61 percent.

From a year earlier, the chipmaker saw a whopping 339 percent jump in operating profit.

“The company set the record-high quarterly revenue and operating profit thanks to favorable market conditions attributed to product price hikes during the first quarter, which has been traditionally off-season in the memory semiconductor industry,” SK hynix said in a statement.

Despite a 5 percent fall in the company’s DRAM shipments from the fourth quarter due to short supplies, the average selling price rose 24 percent.

According to market researcher DRAMExchange, a fixed price of 4-Gigabit DDR4 for average PCs stood at $2.75 as of March, up from $1.31 last June.

A 64-Gb NAND flash chip rose from $2.24 to $3.56 during the same period.

“SK hynix will speed up to further expand 2Znm DRAM and start to mass produce 1Xnm DRAM in the second half of this year,” it said. “Also, the company will supply 48-Layer and 72-Layer 3-D NAND to high density mobile and SSD markets.”

Some in the financial market forecast SK hynix’s annual operating profits could total 10 trillion won this year, considering strong demand for DRAM chips both for servers and mobile devices.

“The company is expected to have sharp improvements in the operating margin of over 40 percent in the upcoming quarters,” said Kwon Sung-ryul, an analyst at Dongbu Securities. “High demand for DRAM chips would continue well into the second half of this year, causing short supply.”

During a conference call Tuesday, the company said demand for DRAM chips would grow around 20 percent compared to last year.

Regardless of the ongoing bid for Toshiba’s NAND flash unit, SK hynix will invest a total of 7 trillion won in the 3-D NAND flash business for the year as initially planned, a company official said.

SK hynix is currently the fifth-largest player in the global NAND market. If it acquires the Toshiba unit, the company would rank as the world’s second-largest after Samsung Electronics.

By Song Su-hyun (song@heraldcorp.com)