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Wed, Dec 24, 2008 - Page 10 News List

Hynix creditors offer fresh loans

RESCUE PACKAGE Controlling shareholders in the chipmaking giant will provide 500 billion won in loans and the company will sell 300 billion in new stock

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Hynix Semiconductor Inc, the world’s second-largest maker of computer memory chips, will receive 800 billion won (US$595 million) in financial support from controlling creditor banks because of mounting losses.

Controlling shareholders will provide 500 billion won in fresh loans and extend the maturity of Hynix’s debt until the end of next year, main creditor Korea Exchange Bank said in a statement yesterday.

Hynix will also sell 300 billion won of new stock on the market that creditors will buy if unsold, Korea Exchange said.

Hynix joins Qimonda AG in receiving rescue packages in the past week as the economic slump exacerbated a glut that has driven prices to record lows and forced chipmakers to scale back production.

Ichon-based Hynix is projected to report a record operating loss this quarter, a Bloomberg survey of analysts showed.

Prices of the benchmark DRAM chip have declined 59 percent this year to below the cost of production, leading to losses at all major producers except industry leader Samsung Electronics Co.

In the past three days, prices have gained 28 percent, said Dramexchange Technology Inc, Asia’s biggest spot market for chips, after Hynix joined Micron Technology Inc and Taiwanese chipmakers in reducing output.

Korea Exchange Bank and other financial institutions own a controlling 36 percent stake in the chipmaker. Korea Exchange owns 8.2 percent of Hynix, Woori Bank has 8 percent and Shinhan Bank has 6.1 percent.

Separately, Fujitsu Ltd, a Japanese maker of chips for servers, mobile phones and flat-panel TVs, will fire 400 workers at its domestic factories as demand for semiconductors declines amid fears of a global recession.

Tokyo-based Fujitsu will reduce staff at its seven factories by terminating their labor contracts before their expiry next March, spokesman Toshiyuki Fukuoka said yesterday.

The company will almost quadruple job cuts from 100 planned earlier because of a slump in sales, he said.

Fujitsu will extend a halt in its output for holidays for longer than last year, Fukuoka said.

The company’s rivals Toshiba Corp and NEC Electronics Corp earlier announced similar plans to halt output.

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