SK hynix Inc., the world's No. 2 memory chip maker, said Thursday its net profit surged 348.9 percent in the first quarter from a year earlier on the back of improved sales in dynamic random access memory chips.
Net profit came to 802.2 billion won ($771.7 million) in the January-March period, soaring from 178.7 billion won in the previous year, the company said in a regulatory filing.
Revenue gained 34.6 percent on-year to 3.74 trillion won in the first quarter, and operating profit also jumped to 1.05 trillion won from last year's 316.9 billion won.
The last time that the operating profit went over the 1-trillion won level was in the third quarter of 2013.
SK hynix said the stronger bottom line came from solid sales of DRAMs and the full-fledged normalization of its production line in China from January after a stall from a fire in September last year.
The company said the first-quarter sales volume of DRAMs advanced 20 percent from the previous quarter, with their prices being stabilized following steady growth of demand.
SK hynix currently accounts for about 26 percent of the global market for mobile DRAMs, while its bigger rival, Samsung Electronics Co., garners nearly half of the sector.
In contrast, its NAND flash memory chip business suffered, due mainly to the heightened competition in the global market that brought down prices. The quarterly sales in the sector fell 8 percent from the October-December period of 2013.
The latest figures met the market consensus, as analysts expected SK hynix will post an operating profit of 978.5 billion won and a revenue of 3.7 trillion won over the January-March period.
In 2013, SK hynix's net profit came to 2.87 trillion won, with its revenue reaching 14.1 trillion won. Its operating performance turned to a profit of 3.3 trillion won from a year earlier.
The chip maker gave a rosy outlook on future performances. China's launch of the long-term evolution network in December last year will continue to buoy its mobile DRAM business, and the NAND flash business will also gather ground, boosted by mobile devices, it said.
The company said the sales of PCs and server DRAMs will stand strong for the time being, with the company set to commence production of DRAMs equipped with 20-nano technology.
As for the NAND flash sector, the company said it expected a turnaround from the second quarter on, helped by rising demand for tablet PCs and solid state drives.
The company added it aims to improve production efficiency by expanding sales of 10-nano level products, and start providing samples of 3D NAND.
Shares of SK hynix closed at 40,750 won on the main bourse Wednesday, up 2.39 percent from Tuesday's close, while the benchmark Korea Composite Stock Price Index edged down 0.19 percent.
It marked the first time in nearly eight years for the SK hynix share price to surpass the 40,000-won mark. The first-quarter earnings were released before the market opened. (Yonhap)