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Hynix, Elpida report quarterly losses

Everyone knows a rebound in the DRAM market is inevitable, the only question is when.

Nam Hyung Kim, chief analyst at researcher ISuppli Corp

Hynix Semiconductor Inc said yesterday it swung into the red in the first quarter on a sharp fall in memory chip prices amid oversupply in the industry.

Hynix Semiconductor, the world’s second largest manufacturer of computer memory chips after Samsung Electronics Co, posted a net loss of 674.79 billion won (US$678.5 million) for the three months ended March 31.

The company recorded a net profit of 418.11 billion won during the first quarter last year. Sales fell 35 percent to 1.573 trillion won.

Hynix said in a regulatory filing it had decided to cut capital expenditure this year by 1 trillion won to 2.6 trillion won, citing the semiconductor business environment. It did not elaborate.

Separately, Elpida Memory Inc, Japan’s largest maker of computer memory chips, reported a second consecutive quarterly loss.

The net loss was ¥29.2 billion (US$280 million) during the fiscal fourth quarter ended March 31, compared with a profit of ¥8.48 billion a year earlier, Elpida said in a statement on its Web site yesterday. Sales fell 37 percent to ¥90.4 billion.

But computer memory chip prices will rise 2 percent this quarter, after slumping 80 percent in the past year, showing that the “worst is over,” researcher ISuppli Corp said.

The rating for the US$31 billion dynamic random access memory chip industry was raised to “neutral” from “negative,” ISuppli said yesterday.

Prices of memory chips tumbled last year after manufacturers overestimated demand generated by the release of Microsoft Corp’s Windows Vista operating system. UBS AG and Macquarie Group Ltd have projected that prices, now close to record lows, will not rebound until the second half of this year.

“Everyone knows a rebound in the DRAM market is inevitable, the only question is when,” said Nam Hyung Kim, chief analyst at ISuppli. “There are still many risks associated with the suppliers’ high inventory levels.”
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