Samsung, Hynix Enjoying More Profits in Chips
By Kim Yoo-chul
Samsung Electronics and Hynix Semiconductor are enjoying more profits from their chip businesses thanks to increasing demand in the back-to-school season.
The company's chip unit head Kwon Oh-hyun clarified that his division will post better operating profits in the third quarter from the second quarter, while Hynix is widely believed to have turned into the black in the third quarter.
``The third quarter will be better from the previous quarter as chip prices are in the normalization stages after a years-long slump,'' Kwon said Tuesday. It was the first time since he took the top position in Samsung's chip unit in May last year that he has spoken so positively.
``Hynix has been on the path of profit since the second quarter,'' Hynix spokesman Park Hyun said.
Analysts forecast that Samsung chip unit's operating profits for the upcoming quarter will triple to nearly 1 trillion won, while that of Hynix is estimated to hit 100 billion won.
The increased use of double data rate or DDR3 DRAM chips ― an enhanced form of DRAM ― as well as new production technology will allow chipmakers to produce more DRAM on each silicon wafer. Thousands of chips can be made on a single 12-inch round silicon wafer.
``There is a shortage of DDR3. The demand for the upgraded chips in new PCs has been increasing,'' a high-ranking Samsung executive told The Korea Times. DDR3 has an edge in energy consumption and has a longer battery life in mobile PCs. Samsung and Hynix are the only mass-producers fully capable of producing the chips with the right timing.
Inventories in the global PC industry have hit lows in the last three months, which is more good news for Samsung and Hynix.
``Any big orders from PC makers to replenish their languishing supplies will give chip firms a spike. That's why the timing is not ripe for profits in chip stocks,'' Lee Ka-geun, an analyst at IBK Securities, said.
Recent dramatic activity has also been seen in China, which is second to the United States in PC sales and has a greater proportion of first-time buyers. Beijing's economic-stimulus plans appear to have helped PC makers introduce newer models, pushing chipmakers to supply more chips.