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UPDATE 1-SK Hynix Q3 profit tumbles on further decline in mobile chip prices

SEOUL, Oct 24 (Reuters) - South Korean chipmaker SK Hynix Inc posted its smallest quarterly profit in three years with a 93% on-year drop in July-September earnings, as prices of memory chips for smartphones continued to decline.

The world's second-largest memory chip maker after Samsung Electronics Co Ltd said third-quarter operating profit was 473 billion won ($404.68 million), above a 418 billion Refinitiv SmartEstimate - which gives more weighting to recent estimates by analysts who are more consistently accurate.

The result compared with profit of 6.5 trillion won in the same period last year, amid a slump in the cyclical memory chip industry following a two-year boom.

The company also said the amount of money set aside for investment next year would be considerably lower than this year.

Some analysts said the memory industry may begin to recover this year as data centres boost purchases for server DRAMs after clearing inventories.

South Korean exports, backed by semiconductor sales, rose 4.1% in the third quarter after a 2.0% gain in the second, a sign of recovery following two consecutive quarters of contraction.

Prices for DRAM chips, which help devices perform multiple tasks, are forecast to fall by a low-single digit percentage in the first quarter of 2020, compared to the 20% to 25% drop in the same period this year, market tracker TrendForce said.

Hopes for a memory recovery are tempered by uncertainty about the impact of U.S.-China trade tension and fears of a global technology industry slowdown, analysts said.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's biggest contract chipmaker, has eased investor fears with a bullish forecast for fourth-quarter revenue on strong demand for faster mobile chips and new high-end smartphones.

(Reporting by Ju-min Park and Heekyong Yang; Editing by Stephen Coates and Christopher Cushing)