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Hynix stops selling on spot market because of demand

Hynix Semiconductor Inc, the world's second-largest maker of memory chips, said it stopped selling computer memory chips through the spot market this month because demand from customers such as Dell Inc is increasing.

"We plan to supply our chips only to our long-term customers for the time being," Park Hyun, a spokesman for Ichon, South Korea-based Hynix said by telephone yesterday. "There is demand from personal computer makers."

Hynix currently sells 85 percent of its dynamic random access memory to customers through contracts and 15 percent through the spot market, according to Park. Hynix doesn't provide figures for its production capacity.

"Halting supply in the spot market should help stabilize prices, which will be positive for contract prices as well," said James Song, an analyst at Daewoo Securities Co in Seoul. "Hynix's decision shows that it is concerned with what is going on in the spot market, even if it is a smaller portion."

Spot prices of the benchmark DRAM chip have declined 23 percent this month, according to Taiwan-based Dramexchange.com (集邦科技), Asia's biggest spot market for chips. Contract prices charged to customers, which are set twice a month, fell 13 percent in the second half of September from the first half.

Hynix said in July it plans to increase third-quarter DRAM shipments, measured in terms of storage capacity known as bits, by a "mid-teens" percentage from the second quarter.

Hynix shares gained 6 percent to close at 30,950 won in Seoul.
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