[Click eStock] "PC·Server Demand Up... SK Hynix Expected to Surpass 1.6 Trillion KRW Operating Profit in 1Q"

Strong PC Sales... NAND Division Expected to Return to Profitability from Q2

[Asia Economy Reporter Minwoo Lee] SK Hynix is expected to achieve an operating profit exceeding 1.6 trillion KRW in the first quarter of this year, driven by improvements in PC and server demand. This demand increase is expected to continue through the second half of the year.

On the 23rd, NH Investment & Securities forecast that SK Hynix will record consolidated sales of 7.76 trillion KRW and an operating profit of 1.609 trillion KRW in the first quarter of this year. The operating profit is expected to increase by 66.6% compared to the previous quarter and by 101.1% compared to the same period last year. This figure surpasses the market consensus of 1.237 trillion KRW by more than 30%.

The strong PC sales were a key factor. Doh Hyun-woo, a researcher at NH Investment & Securities, said, "Structural demand for remote work and online education led to PC sales reaching 280 million units last year, marking the highest level in the past decade," adding, "The strong PC sales are expected to continue through the second half of this year, with annual PC shipments projected to increase by about 10% compared to last year."

Improvement in NAND segment performance is also anticipated. This is due to major North American customers resuming data center investments recently. Doh said, "The shipment of servers equipped with Intel's next-generation server platform 'Whitley' is expected to accelerate this trend starting in the second quarter," explaining, "Changes in Intel's server platform occur once every 4 to 5 years and represent a major demand event."

Additionally, due to demand improvement and conservative investments, some NAND prices are expected to rise starting from the second quarter, following the development of the 176-layer 3D NAND in December last year. This is expected to lead the NAND segment to turn profitable from the second quarter. Doh analyzed, "Intel's NAND segment performance will be reflected from the end of this year, and NAND shipments are expected to increase by about 70% next year compared to this year," adding, "Intel's advanced solution technology is also positive in terms of overall competition improvement in the NAND segment."

Based on these factors, NH Investment & Securities maintained a 'Buy' investment rating and a target price of 180,000 KRW for SK Hynix. The closing price on the previous day was 138,000 KRW.

This content was produced with the assistance of AI translation services.