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System semiconductors

SK Hynix’s 2020 non-memory chip sales seen to hit record high

By Nov 09, 2020 (Gmt+09:00)

SK Hynix Inc. is on track to record its highest sales from its non-memory chip business this year after the world’s second-largest DRAM memory chipmaker beat ON Semiconductor to become the No. 4 image sensor maker, according to semiconductor industry sources on Nov. 8.

The South Korean chipmaker is making its foray into the high-end image sensor market with increased production lines, as its expanded foundry plant in Wuxi, China, is set to begin full operations next month.

Including the upcoming shipments from the Chinese facility, SK Hynix’s non-memory chip business, or system semiconductor business, is expected to post over 1.4 trillion won ($1.3 billion) in sales for full-year 2020, the sources said.

That compares to last year's 1.07 trillion won, combining 661.5 billion won from the foundry business and 411.6 billion won from image sensor sales.

“The recovering global smartphone market is driving higher demand for image sensors,” said one of the sources.

 In the July-September quarter, its overall sales rose 19% to 8.13 trillion won.

SK Hynix’s 2020 non-memory chip sales seen to hit record high

SK Hynix is transferring production equipment from its plant in Cheongju, South Korea to the Wuxi plant, which completed the construction of a cleanroom in the first half of this year. Last week, it moved 194.2 billion won worth of chip manufacturing equipment to the Wuxi plant.

SK Hynix owns 100% of the foundry plant in China which manufactures chips used in consumer electronics, including CMOS (complementary metal-oxide-semiconductor) image sensors and displayer driver IC (DDI) chips, using 8-inch wafers.

A semiconductor image sensor converts light into digital signals and is used in digital cameras and mobile phones. DDI produces images on a panel display.

According to market research firm Omdia, SK Hynix climbed to the fourth position in the global CMOS image sensor market in the second quarter, beating ON Semiconductor. It took a 4.8% market share in the April-June period. The Korean company is estimated to have maintained its No. 4 position with a 4.3% share in the third quarter.

To step up the image sensor production, SK Hynix has transformed part of its DRAM production lines in the Cheongju plant to image sensor manufacturing lines, targeting the market for 20 megapixel resolution image sensors used in mid-range cameras.

To expand its portfolio in the CMOS image sensor business, it has set up new product lineups, using its Black Pearl technology for premium markets that use 50 megapixel image sensors.

The image sensor business appears to be on target to reach $630 million in sales for the entire year of 2020. Its foundry business is estimated to report over 700 billion won for full-year 2020, as a beneficiary of the US government’s trade sanctions against SMIC, China’s biggest chipmaker.

Last week, SK Hynix reported that its third-quarter net profit more than doubled to 1.08 trillion won on robust mobile chip sales and increased demand from China’s Huawei Technologies Co., one of its key customers.

In October, SK Hynix Inc. has signed a 10.3 trillion won ($9 billion) all-cash deal to buy Intel Corp.’s NAND memory chip business that will propel the South Korean chipmaker to second in the sector’s global rankings.

SK Hynix Inc. has vowed to triple its NAND flash memory sales within five years, buoyed by its recent acquisition of Intel Corp.’s NAND memory and storage business for $9 billion.

Its bigger rival Samsung Electronics Co., a latecomer to the foundry industry, is also expanding its system semiconductor business portfolio.

Write to Jeong-Soo Hwang at hjs@hankyung.com

Yeonhee Kim edited this article.

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