SK Hynix echoes TSMC with warning of slower growth in mobile chips

SK Hynix Inc became Asia’s second major semiconductor maker this earnings season to warn of slower growth in smartphone chip sales, but it said this would be offset by robust demand for server and other high-end chips.

Increasing signs of a maturing global smartphone market have fueled expectations that last year’s boom in chip demand is moderating and so will earnings growth.

The South Korean chipmaker met market expectations with a 77 percent jump in first-quarter operating profit to 4.4 trillion won ($4 billion). That was just short of last quarter’s record.

At close on Tuesday, its shares were down 2.73 percent to 82,100 South Korean won ($76.32), while those of large rival Samsung Electronics Co lost 2.77 percent to 2,523,000 won.

“SK Hynix’s first-quarter shipments fell much faster than previous company guidance, which seems to have fanned concerns about slowing mobile demand,” said Song Myung-sup, analyst at HI Investment & Securities.

Worldwide smartphone shipment volumes shrank for the first time late last year, according to a report from search provider Strategy Analytics, with high-end smartphone brands facing increasing competition from the likes of low-cost Chinese vendor Xiaomi.

Taiwan Semiconductor Manufacturing Co warned last week of softer smartphone demand, cutting its revenue target and sending shares of key client Apple and as well as other chip producers lower.