SK Hynix publicized a $1.6 billion share buyback and said it would invest $3.1 billion to bod a new semiconductor plant in South Korea, sending shares in the world’s No.2 DRAM respect chipmaker up as much as 3.5 percent.
The investment plan comes unruffled as prices of some memory chips are falling rapidly due to oversupply and dimmer sales to the smartphone industry.
The $121 billion global memory sliver industry has enjoyed an unprecedented boom since late 2016, with profits flood to record highs and margins rising above 70 percent thanks to disciplined construction after years of consolidation.
But the industry’s shift to a newer technology of 3D NAND scintilla stacks – which are cheaper to assemble than two-dimensional chips – has learn ensured output grow faster than demand this year and self-conscious smaller players to aggressively cut prices to keep market share.
SK Hynix stipulate the types of chips produced at the new plant, which will be completed in October 2020, commitment be decided later depending on future market conditions.
“It is essential to detect additional investments in order to meet growing memory chip bid,” the company said in a statement.
The 1.8 trillion won ($1.6 billion) divide up buyback plan comes a day after SK Hynix reported a record every three months profit.
Its shares gained as much as 3.5 percent early on Friday, buoyed by the buyback arrangement.