Hynix's net loss narrows sharply in Q2

(ATTN: ADDs analysts' comments from 10th para)
SEOUL, July 24 (Yonhap) -- Hynix Semiconductor Inc., the world's second-largest
memory chip maker, said Friday its net loss narrowed sharply in the second
quarter due to an easing of the global chip glut.

Hynix lost 58 billion won (US$46.6 million) in the April-June period, compared
with a 711 billion won deficit a year earlier, the company said in a statement.
The figure marks the seventh straight quarterly loss for the chipmaker.
Sales dropped 10 percent on-year to 1.68 trillion won, while operating loss
widened to 211 billion won from a 171.7 billion won shortfall a year earlier, it
said.
Shares of Hynix had risen 0.91 percent to 16,550 won as of 10:00 a.m. on the
Seoul bourse. The results were announced before the stock market opened.
Hynix said it was able to cut the loss as prices for dynamic random access memory
(DRAM) chips and NAND flash memory chips rose despite the prolonged economic
downturn.
The global chip market was in a recovery mode in the second quarter, helped by
spending cutbacks by some manufacturers and increasing demand for mobile devices
and digital TVs, according to market watchers.
"With the worst behind us, we hope to get a better result in the next quarter,"
Kim Min-cheol, chief financial officer of Hynix, said during a telephone
conference with analysts.
Hynix cautiously offered an upbeat outlook for the third quarter, saying its
sales will depend on the global economy.
"The key barrier will likely be on the demand side, which is mainly subject to
global economic conditions," said Kim. "Memory demand will hinge on how rapidly
the global economy recovers."
Analysts, however, were divided on the outlook for the latter half of the year.
"Demand for personal computers is believed to have hit bottom, and overseas
chipmakers are not likely to sharply increase their supply of memory chips," said
Lee Ki-geun, an analyst at IBK Investment and Securities.
"A return to the black will come sooner than expected as prices start to rise."
Others say the recent improvement in prices is temporary.
"Second hand manufacturers are currently 'restocking', filling their inventories
with memory chips while the prices remain low," said Lee Min-hee at Dongbu
Securities.
"When they secure an adequate amount of memory chips, demand will fall and prices
will drop accordingly," Lee said.
Park Hyun, a researcher at Prudential Investment and Securities, also predicted
that prices both for DRAM chips and NAND flash memory chips would fall in the
latter half of 2009.
"In the second quarter, the price of NAND flash memory chips rose as Japan's
Toshiba Corp. cut its output. Since May, when Toshiba increased its production,
the price has fallen 12 percent," Park said, adding that demand for DRAM chips
will also decrease.
ygkim@yna.co.kr
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