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John Wang
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Stocks
April 23 19:20

SK Hynix warns of chip manufacturing crisis

Company relies on high demand for servers.
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SK Hynix has stated that swings in demand for chips will most likely continue. the possible prolongation of national lockdowns might significantly impact development, sales and production around the world.
The company from South Korea that, among others, makes chips for Apple, revealed a 41% reduction of profits in Q1. The results still surpass the estimates - company got a boost from a rising server demand.
The operating profit of SK Hynix in the first three months of 2020 amounted to US$649. It beats the forecast of Refinitiv, yet it is still almost two times lower than the Q1 2019 profit. The company’s shares went down 0.95%.
World’s smartphone market is likely to experience a deeper fall in 2020 than in 2019. Yet SK Hynix hopes to offset the losses with higher demand for servers and personal computers - as more people switch to remote work, these are needed more. Nevertheless, the company claims, that further economic volatility and containment measures can bring the whole sector down.