SK Hynix Inc., the world’s third largest semiconductor company, will ramp up high-performance chip-making after upset performance in the first quarter - the worst in three years - due to poor global demand and fall in mainstream memory chip prices. It hopes for help from mass production in 20-nanometer-class dynamic random access memory (DRAM) chips and 3D vertical NAND flash chips.

The company on Tuesday reported an operating profit of 561.8 billion won ($488 million) for January-March, just a third of 1.58 trillion won it earned in the same period last year. The figure was down 43.2 percent from 988.9 billion won in the previous quarter and dealt as a disgrace for the company that had kept up an income of more than 1 trillion won for seven consecutive quarters from the third quarter in 2015.

Downward trend in shipments and selling prices from poor global demand led to its worse-than-expected performance. DRAM shipments fell 3 percent and the average selling price 14 percent on quarter in the first quarter.

The chipmaker predicts market conditions would improve and meanwhile plans to strengthen technological edge. It will expand application of 20-nanometer-class technology in making chips for mobile devices as well as PCs. It will also accelerate research and development (R&D) for 10-nanometer-class.

It will speed up shift to the 14-nanometer class and start mass production of third-generation 48-layer in the second half of the year to stay ahead in 3D NAND technology. In chip-making, the key to competitiveness is to make the silicon-chip smaller and thinner in nano-scale (a nanometer is a billionth of a meter) to keep up the tradition of minting generations of speedier and less-costly chips.

Kim Joon-ho, the company’s president in a conference call after releasing first-quarter data, said certification for the 1TB solid state drive (SSD) with the second-generation 36-layer 3D NAND flash is near completion, allowing the company to generate sales from the cutting-edge product from the second quarter. The company plans to beef up monthly output to 20,000 to 30,000 sheets from the second quarter and would be ready to mount the products onto mobile products from the second half.

By Song Sung-hoon

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]