SK Hynix shares extend slide on earnings growth worries

SEOUL (Reuters) - Shares in South Korean chipmaker SK Hynix Inc fell sharply in early trade on Tuesday, heading for their fifth straight day of declines on concerns about slower earnings growth at the world's second-largest supplier of memory chips.

SK Hynix last week reported it expects slower growth in its third-quarter shipments of dynamic random access memory chips, used in personal computers as well as mobile devices like smartphones. The stock is down more than 9 percent since the firm issued its guidance.

On Tuesday the chipmaker's shares were trading down 4 percent at 44,700 won as of 0207 GMT (3.07 a.m. BST), underperforming the 0.6 percent rise for the wider market and marking the biggest daily percentage drop since July 9.

In a note to clients on Tuesday, IM Investment & Securities analyst Lee Min-hee downgraded its SK Hynix rating to hold from buy and cut its target price by 10,000 won (5.74 pounds) to 50,000 won.

Lee said in the report that SK Hynix would be hurt by inventory correction at Chinese phone manufacturers, stemming from slower-than-expected takeup of 4G devices in the world's largest smartphone market.

(Reporting by Se Young Lee; Editing by Kenneth Maxwell)