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SK Hynix says industry woes ‘unprecedented’, to cut investment – Al Jazeera English

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South Korean chipmaker’s third-quarter profit tumbles 60 percent amid a surge in inflation.

South Korean chipmaker SK Hynix says the memory chip market is facing an “unprecedented deterioration”, as its third-quarter profit tumbled 60 percent amid a surge in inflation.

“Supply will continue to exceed demand for the time being,” the world’s second-biggest memory chip maker said in a statement on Wednesday, pointing to a fall in notebook and smartphone shipments.

The company said it plans to reduce its investment next year by more than 50 percent on-year.

The profit fall comes as red-hot inflation has hurt demand for electronic devices and the memory chips that go in them.

SK Hynix’s operating profit fell to 1.66 trillion won ($1.16bn) in the July-September quarter, from 4.2 trillion ($2.93bn) won a year earlier. The result was below analysts’ expectations of a 1.87 trillion ($1.31bn) won profit, according to Refinitiv SmartEstimate.

Prices of DRAM chips, used in devices and servers, fell by about 20 percent in the third quarter from the second, SK Hynix said. Prices of NAND Flash chips that serve the data storage market fell more than 20 percent.

The lacklustre results echo bigger rival Samsung Electronics’ third-quarter earnings slump and United States peer Micron Technology Inc’s warnings of a sharp decline in PC and smartphone sales.

Chipmakers had enjoyed a strong post-pandemic demand surge until early this year, which created a shortage of certain chips and disrupted the production of vehicles and various electronic devices.

But chip demand has turned sharply weaker in recent months, as soaring inflation, rising interest rates and a gloomy economic outlook have led consumers and businesses to tighten their spending.

The global smartphone market contracted 9 percent on-year in July-September, marking the worst third quarter since 2014, according to analysis provider Canalys.

DRAM chip prices are expected to fall further in the current quarter as memory chip companies have lost their bargaining power with customers who have stockpiled chips and now struggle to clear them due to weak demand, said Wi Min-bok, an analyst at Daishin Securities.

With the memory chip glut seen to last until the first half of next year, SK Hynix joins chipmakers that have begun curtailing supply and investment. Micron plans to cut investments by more than 30 percent next year. TSMC has also cut its 2022 investment plan.

SK Hynix said its 2022 investment is expected to be in the “upper range of 10-20 trillion won” ($7-14bn).

Despite the current drop in demand for server memory chips, SK Hynix forecast more appetite in the longer term as hyper-scale data centres continue their investment to meet growth in industries such as artificial intelligence (AI), big data and the metaverse.

Third-quarter revenue fell 7 percent on-year to 10.98 trillion won ($7.6bn).

SK Hynix shares were flat in early morning trade, versus a 0.3 percent rise in the wider market

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX composite little changed in late-morning trading, U.S. stock markets down

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TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.

The S&P/TSX composite index was up 0.05 of a point at 24,224.95.

In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.

The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.

The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.

The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.

This report by The Canadian Press was first published Oct. 10, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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