SEOUL, April 28 (Yonhap) — SK hynix Inc., South Korea’s second-largest chipmaker, said Wednesday its first-quarter net profit jumped 52.9 percent from a year earlier thanks to strong demand for memory chips for mobile and computer products.

Its net profit stood at 992.6 billion won (US$893.9 million) in the first quarter of the year, compared with a net profit of 649 billion won a year earlier, the company said in a regulatory filing.

Operating income for the January-March period was 1.32 trillion won, up 65.5 percent from a year ago, while sales rose 18 percent to 8.49 trillion won.

Compared with the fourth quarter of 2020, its operating profit surged 37.1 percent, while sales climbed 6.6 percent.

“Although the first quarter is usually off-season for the semiconductor industry, the market conditions improved as demand for memory products for PCs and mobiles increased,” SK hynix said. “In addition, cost competitiveness has increased as yields of major products have improved.”

SK hynix said its DRAM bit shipment increased by 4 percent quarter-on-quarter as it focused on mobiles, PCs and graphics for sales, with the average selling price (ASP) also growing 4 percent from the previous three months.

For NAND flash, the company said the bit shipment increased by 21 percent compared with the previous quarter, although its ASP dropped by 7 percent.

The chipmaker said it is “optimistic” about the market conditions after the first quarter.

“We expect the inventory of customers to decrease quickly as current stronger-than-expected demand growth in the broader IT market continues,” it said.

The company expected DRAM demand bit growth to be over 20 percent for this year, while that of NAND flash is likely to be in the mid-30 percent range.

In the DRAM sector, SK hynix said it plans to start supplying high-capacity multi chip package based on 12GB DRAM products in the second quarter and decided to increase the production volume of the third-generation 10-nanometer (1znm) DRAM.

The company also plans to finish developing the fourth-generation 10-nanometer (1anm) DRAM technology using extreme ultraviolet (EUV) equipment within this year and begin mass production of the product.

For NAND flash, SK hynix said it will increase the 128-layer product mix to increase the sales of enterprise solid state drives and aims to mass-produce 176-layer products within this year.

In a conference call, SK hynix said it is reviewing the possibility of expanding its 8-inch wafer foundry business amid a global chip shortage.

The company’s foundry subsidiary, SK hynix system ic, is currently transferring its 8-inch wafer facility from South Korea to China.

However, SK hynix said it does not have a plan to expand its business to 12-inch wafer foundry service.

Regarding its capital expenditure plan, SK hynix said it plans to use some of the investments allocated for next year in the second half of this year to solve supply crunch in the chip industry.

However, the company expected production capacity to increase from the investment to occur from next year.

The chipmaker also hinted that it may sell some of its stake in Kioxia Holdings Corp. when the Japanese semiconductor firm goes public in the second half of the year.

In 2017, SK hynix joined a global consortium to invest in Kioxia, then known as Toshiba Memory Corp., and injected about 4 trillion won. The consortium, led by U.S. private equity firm Bain Capital, owns about half of Kioxia’s stake.

Shares in SK hynix plunged 3.7 percent to 130,000 won on the Seoul bourse, underperforming the broader KOSPI’s 1.06 percent decline. The earnings results were released before the market close.