South Korea’s Hynix Semiconductor, the world’s second-largest memory chipmaker, said yesterday it would cut production by up to 30 percent from late this month because of weak demand and falling prices.
The company is trying to ride out the global economic downturn by reducing expenses and selling idle assets, president Kim Jong-kap told the Seoul Economic Daily.
It would be Hynix’s first cut in DRAM (dynamic random access memory) chip output this year.
Hynix plans to raise about 1 trillion won (US$755 million) to counter a liquidity shortage, Kim was quoted as saying, in comments confirmed by a company spokesman.
He said Hynix was in talks with potential buyers to sell its US chip plant at Eugene, Oregon. It said in July it would shut the plant, which employed 1,200 people.
“It is not clear when we can complete negotiations,” Hynix spokesman Park Hyun told reporters in Seoul.
Analysts said chipmakers in Taiwan or China may be interested in the Eugene plant, but that a deal was unlikely in the near future.
“Almost all chipmakers are suffering from losses. They don’t have money. They want to hold cash to weather the difficult times,” Kim Gee-soo, of Goodmorning Shinhan Securities, told Dow Jones Newswires.
Hynix was on the verge of collapse after the 1997-1998 East Asian economic crisis but creditors injected a total of US$4.6 billion in 2001 and 2002 to rescue it.
In recent weeks it has been seeking a fresh funds injection.
Lead creditor Korea Exchange Bank has said Hynix would receive 800 billion won in fresh funds if five key creditors reach agreement by today.
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