SK Hynix's warning on coronavirus sends local chip makers lower

  • Markets
  • Friday, 31 Jan 2020

KUALA LUMPUR: South Korea's SK Hynix's warning on the coronavirus and its impact on chip production saw local chip makers and semicon-related stocks sliding on Friday.

At midday, KESM had fallen 80 sen to RM10.10 – the lowest since Jan 15.

MPI lost 14 sen to RM12 – the lowest since Jan 10 -- and Globetronics five sen to RM2.38.

Dufu lost 15 sen to RM3.97 and Frontken 14 sen to RM2.36.

On Wednesday, CGS-CIMB Equities Research expected a prolonged coronavirus outbreak in China as potentially impacting MPI’s profitability as Carsem’s Suzhou (CSZ) contributed 30% of the group’s revenue in FY6/19.

CSZ is the flagship plant for radio frequency (RF) components under MPI; “we estimate RF portfolio accounted for nearly 40% of CSZ’s sales in FY19”, it said

Reuters reported on Friday that SK Hynix, the world's No.2 memory chip maker, warned a new virus outbreak in China could pose a threat to chip production and said it would sharply reduce annual investment after posting a steep fall in quarterly profit.

The spread of coronavirus, which has killed more than 200 people and infected nearly 10,000 worldwide, threatens to hit the global economy. Manufacturers have suspended production in China and airlines cancelled flights, disrupting supply chains.

"We are preparing a contingency plan," SK Hynix finance chief Cha Jin-seok told an earnings call on Friday.

The virus outbreak has caused no production disruptions at Hynix, which has a chip plant in the eastern Chinese city of Wuxi, but manufacturing could be hit if the situation was prolonged, Cha said.

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SK Hynix , KESM , MPI , coronavirus , chip production


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