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South Korea's two semiconductor giants, samsung electronics and SK hynix, reported lackluster results for the fourth quarter of 2018 and pessimistic forecasts for 2019, the Korea daily Asia reported on January 22.

SK hynix's sales in the fourth quarter of 2018 were about 8.5 trillion won to 10 trillion won, and its operating profit was about 4.5 trillion won to 5.2 trillion won, according to South Korea's electronics and securities industry.

SK hynix's sales in the fourth quarter were about 8.588 trillion won, down 25 percent from the previous quarter and 5 percent from the same period last year, according to a report released by South Korea's xingguo securities on Monday. Operating profit was about 4.552 trillion won, down 30 percent month-on-month and 2 percent year-on-year. DRAM server market demand is the main reason for the weak performance. Server DRAM accounts for 40 per cent of SK hynix's total sales.

SK hynix will release the 2018 fourth quarter earnings report on the 24th, as the date is approaching, the industry expectations have been lowered again and again. SK hynix made an operating profit of 5.209 trillion won in the fourth quarter of last year on sales of 10.136 trillion won, DB financial investment reported Thursday. SK hynix reported sales of 10.1 trillion won and operating profit of 4.9 trillion won in the fourth quarter, according to meroz securities.

The semiconductor industry had forecast that DRAM shipments would remain in the single digits in the fourth quarter, while NAND flash memory chips would rise to about 20 percent. Due to the decline in smartphone market demand, amazon, Google and other international companies' plans to add more data centers are delayed. Since last October, DRAM shipments have decreased, and NAND flash memory chip shipments can only maintain above 10%, but it is difficult to reach 20%.

Therefore, the industry on SK hynix 2019 annual performance expectations are also relatively pessimistic. Xingguo securities forecasts SK hynix's 2019 sales of 31.6 trillion won, down 19 percent year-on-year, and operating profit of 14.134 trillion won, down 33 percent year-on-year.

Semiconductor powerhouse samsung electronics suffered a setback in the fourth quarter. Samsung reported fourth-quarter operating profit of won10.8 trillion on sales of won59 trillion. Operating profit was the lowest since the first quarter of 2017, down 38.5 per cent from the previous quarter. Operating profit fell by 6.77 trillion won in just three months, down 28.7 per cent from a year earlier. Sales fell 9.9 per cent month-on-month and 10.6 per cent year-on-year. Xingguo securities forecast that samsung electronics sales this year will be 215 trillion won, down 12 percent year-on-year, and operating profit will be 49 trillion won, down 17 percent year-on-year.