SK Hynix capex ’17 $9.8 bn, will spend more in ’18

2018.01.25 15:48:43 | 2018.01.25 16:24:47

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SK Hynix spent a record 10.3 trillion won ($9.8 billion) to scale up capacity in next-generation chips and flash memory last year and plans bigger capital investment this year with ammunitions from its best-ever performance.

“Our capex plan for this year is still under review but it will be larger than last year,” the chipmaker’s chief financial officer Lee Myoung-young said in a conference call after the company reported record quarterly and annual statements on Thursday.

The world’s second largest memory chipmaker reported 4.47 trillion won in operation profit on sales of 9.03 trillion won in the final quarter. For full 2017, operating profit more than quadrupled from 2016 to a historic high of 13.7 trillion won on sales of 30.1 trillion won.

SK Hynix shares ended Thursday at 75,800 won, up 4.7 percent from the previous session.

The company intended to complete the construction of the M15 fab in Cheongju, Korea by the end of this year and start installing facilities early next year but is pushing up the schedule to meet growing demand. Its Wuxi plant in China would be completed by the end of the year as scheduled.

With 72-layer 3D NAND production running at a steady rate, sales of NAND flash chips for mobile solid state drives are expected to start picking up in the second quarter to become its mainstay item in the second half.

Shares of 3D NAND have already exceeded 50 percent of the chipmaker’s total NAND output in the fourth quarter and the 72-layer is anticipated to make up more than half of its 3D NAND production in the latter half.

Extreme ultraviolet lithography facilities, required for next-generation nanofabrication technologies, would be introduced in 2019 when the company starts rolling out 10-nano chips.

SK Hynix forecast shipments in DRAM to grow by more than 20 percent this year against 2017 as supply is likely to stay short and NAND flash to expand by more than 40 percent, slightly above market growth.

But shipments for both DRAM and NAND are expected to fall by a low single digit in the first quarter against the previous quarter, according to Lee.

“The 2018 year started with a mixture of optimism and concern after a historic memory semiconductor boom last year. Memory semiconductor is an essential part of the current paradigm shift in the IT industry and its value will keep going up,” Lee said to maintain a buoyant note.

Cash dividend will jump 67 percent to 1,000 won per share as part of the company`s plans to share its record profits with shareholders. The dividend payout is relatively weak against its profit because of its ambitious capex plans and jump in tax expenses, Lee said.

In the final quarter, the company saw a net non-operating expense of 309 billion won mostly from foreign exchange losses because of a stronger won and 938 billion won in corporate tax.

By Hwang Hyung-gyu and Kim Hyo-jin

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