SK hynix, the chipmaking unit of SK Group, on Tuesday hinted at reducing new investment this year after posting a 65 percent plunge in its first-quarter net income on weak demand for electronics products.

“We invested 6.6 trillion won ($5.7 billion) last year but the spending will be reduced this year,” SK hynix president Kim Joon-ho said during a conference call. 

“Our investment for 3D NAND will start from the second or third quarter as planned.”

In a regulatory filing, the company said revenue declined 24 percent to 3.65 trillion won in the first three months of this year from the same time last year. Net profit was also down 65 percent at 448 billion won from a year ago.

The company said demand for electronics products slowed down in the first quarter, leading to price cuts of DRAM and NAND flash memory chips that are used in smartphones, tablets and personal computers.

Shipments of DRAM and NAND chips declined 3 percent and 11 percent from the previous quarter, respectively, while their average sales prices fell more than 10 percent.

“We do not expect an immediate rebound in DRAM sales,” the president said, citing enhanced competition from Chinese rivals.

He said the company was pinning hopes on new phone launches and value-added chip products to restore profits in the coming months.

By Lee Ji-yoon (jylee@heraldcorp.com)