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Fri, Aug 01, 2008 - Page 10 News List

Hynix registers net loss fueled by cost of closing factory

AP , SEOUL

Hynix Semiconductor said yesterday it swung to a second-quarter net loss from the same period last year on costs to close a US factory. Sales also fell.

Hynix lost 707.81 billion won (US$697.11 million) in the three months ending June 30, the company said in a regulatory filing.

Hynix posted net profit of 213.5 billion won a year earlier.

It was the third straight loss for the Icheon, South Korea-based company. Sales during the second quarter declined 5 percent to 1.85 trillion won from the year before.

O.C. Kwon, a Hynix senior vice president, told analysts on a conference call that the company had a non-operating expense of about 360 billion won during the quarter related to the closure of its US chip plant.

Hynix said last week it would shutter its facility in Eugene, Oregon, amid migration to more advanced technology and falling prices. It is considering selling the equipment and land.

“If we can sell those asset[s] at a higher price later, hopefully, maybe we can record another capital gain,” Kwon said.

Kwon said that Hynix expects the market to improve in the second half of this year as demand for laptop computers, especially low-cost models, “will drive the growth of the PC market.”

Kwon also said the second-quarter’s bottom line was hurt by a weak South Korean won that caused losses on US dollar-denominated debt.

Hynix Semiconductor Inc is the world’s second-largest maker of computer memory chips after Samsung Electronics Co.

The company manufactures DRAM, or dynamic random access memory, chips used in personal computers to temporarily store information that is lost when the device is switched off. It also produces NAND flash memory chips used in digital cameras and music players.

Shares in Hynix, which released earnings results just before the stock market opened, rose 2.1 percent to 21,550 won in morning trading, paring earlier gains of more than 3 percent.

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