From
Send to

Hynix sets 4.2 trillion won facility investment plan

Feb. 2, 2012 - 18:59 By Korea Herald
Hynix Semiconductor said Thursday it will inject 4.2 trillion won in facility investments this year, up 20 percent from last despite the unfavorable market conditions in the semiconductor industry.

Kwon Oh-chul, chief executive of Hynix, said the firm will spend up to 60 percent on NAND Flash memory, used in smartphones and tablet PCs, whereas it spent about 70 percent of facility investments in DRAM last year.

“NAND Flash demand will be driven by mobiles and Solid State Drive notebooks,” he said in an earnings briefing held in Yeouido. “We also plan to strengthen our product portfolio in mobile DRAM and increase the portion of products like SSD chips in NAND Flash.”

The comments come as the company posted 2.55 trillion won ($2.27 billion) in total sales and an operating loss of 167 billion won in the final quarter of last year, triggered by the dampened global economy and the weak demand for PC memory chips.

In a regulatory filing, the world’s second-largest memory chipmaker said its sales from October-December dropped 7 percent year-on-year and the net loss recorded 240 billion won, a slight improvement from the previous quarter.

The consolidated sales for 2011 reached 10.4 trillion won, a 14 percent decrease from 2010, and its operating profit was set at 325 billion won, down 89 percent from 2.98 trillion won in 2010. The net loss for the year amounted to 56 billion won.

“Challenging market conditions were shown last year for the dynamic random access memory industry, leading an overall decrease in IT demand,” he said.

The destructive flooding in Thailand had also dragged down the PC DRAM market conditions, making it impossible for the PC makers to get a steady supply of hard disk drive storages earlier last year.

But the quarter-on-quarter operating profit figures were improving with a positive outlook for the mobile market condition, widened gap with second-tier firms and product portfolio expansion, said Kwon.

“The shareholding structure will improve with SK Telecom becoming our new major shareholder,” he said. “This will remove uncertainty regarding the shareholding structure.”

Although a positive outlook is being drawn for Hynix with its new major shareholder getting ready to settle in by this month and as the overseas competition weakens, the upcoming first quarter is still expected to be a tough one, Kwon said.

“It’s difficult for us to give you an exact prediction of what will happen in the first quarter, but the enhancing market conditions and the increased output will likely improve our profit.”

By Cho Ji-hyun (sharon@heraldcorp.com)