UPDATE:SK Hynix Swings to Profit on Chip Demand for Mobile Devices

--SK Hynix swings to fourth-quarter net profit on solid demand for chips used in smartphones and tablet computers

--Analysts say Apple order cuts remain a risk factor for first-quarter earnings

--South Korean chipmakers remain undecided on 2013 investment plans

(Adds comments from SK Hynix and analysts.)

By Min-Jeong Lee

SEOUL--SK Hynix Inc. (000660.SE) said Wednesday it returned to profit in the fourth quarter on strong demand for chips used in mobile devices, a trend the company expects will continue to drive growth this year.

The South Korean maker of dynamic random access memory, or DRAM, and NAND flash memory chips said it aims to broaden its customer base, particularly as the usage of smartphones and tablet PCs in emerging markets increases. But analysts said its first-quarter results could be weighed by a seasonal slowdown in demand for consumer electronics and a potential cut in orders from Apple Inc. ( AAPL ), to which SK Hynix supplies mobile DRAM and NAND flash chips.

Mike Howard, an analyst at IHS iSuppli, forecasts a $22 million decline in DRAM sales to Apple for the first quarter to $126 million, from an estimated $148 million in the October-December quarter.

Apple's share of NAND flash sales at SK Hynix is likely higher than 30%, "but it's difficult to quantify what the impact will be as Apple also sources from Toshiba and SanDisk," said Dee Robinson, another analyst at IHS iSuppli.

Apple's flat quarterly earnings fanned worries about momentum and demand for its new devices. Chief Executive Tim Cook has urged investors to be skeptical of reports about the company cutting orders with manufacturers.

For the three months ended Dec. 31, SK Hynix posted a net profit of 164 billion won ($151 million), reversing a net loss of 240 billion won a year earlier.

The world's second-largest maker of memory chips after Samsung Electronics Co. (005930.SE, SSNHY) swung to an operating profit of 55 billion won for the December quarter, riding on a 6.5% year-on-year increase in sales to 2.72 trillion won.

Shipments of DRAM, which accounted for 69% of the company's revenue, rose 28% from the previous quarter, while the average selling price fell 10%.

NAND flash accounted for 27% of total sales, with shipments up 19% from the previous quarter and the average selling price rising 6%.

Like Samsung Electronics, SK Hynix remains undecided on investment plans this year due to global market uncertainties and increased competition among mobile-chip suppliers.

Write to Min-Jeong Lee at min-jeong.lee@dowjones.com

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