By Kim Yoo-chul
Staff Reporter
Hynix Semiconductor said it has no plan to raise funds in the latter half of this year as there is no need to grapple with the liquidity problem again.
Rather, the Icheon, Gyeonggi Province-based computer chip player plans to invest some 800 billion won ($640 million) during the second half of the year to boost the shipments of the advanced double data rate 3 (DDR3) DRAM chips.
The plan comes after Hynix reported a drastically reduced loss in the second quarter mainly due to higher prices for its DRAM chips.
Although it does not appear that there will be any big turnaround in the global chip industry this year, the worst is over for the long-suffering memory chip industry ravaged by low demand and anemic prices for more than two years, market watchers said.
"Hynix wiped out liquidity worries completely, as we successfully secured some 2 trillion won in cash from previous measures," its CEO Kim Jong-kap said Sunday.
"Hynix will turn around in quarterly profits in the third quarter, which has been in line with the market consensus. We will invest some 800 billion won in the second half as planned."
In May, Hynix sold 724.5 billion won in new shares to help fund operations and received creditor approval in April for a 1.3-trillion-won fund-raising plan that included the stock sale.
The Korean chipmaker also said in May it plans to sell $305 million in chip packaging and testing equipment to a venture it will set up in China by the end of this year.
The executive also agreed with analysts' positive outlook for the global memory chip industry.
"The memory market hit rock bottom in the fourth quarter of last year. Since then, the market has been recovering," Kim said.
Investment cutbacks by cash-strapped chipmakers have eased the supply glut, bringing more stability to the market for DRAM chips, which are widely used in personal PCs.
According to a report by DRAMeXchange, a research firm, the price of DRAM has increased since global PC makers geared up for back-to-school and holiday sales later this year.
The sales are expected to be stronger due to the arrival of Microsoft's (MS) Windows 7 operating system in October.
Kim said Hynix will develop an enhanced NAND flash chip using 32-nanometer-level processing technology during the fourth quarter of this year and added that the procedures toward the migration of a thinner technology in producing NAND chips are on a smoother track.
NAND flash chips are used in high-end portable electronic gadgets such as smartphones, car navigation systems and MP3 players. The DRAM-focused Hynix lost some market share in the NAND flash sector during the latest quarter.
On the question of the technology transfer stoppage to Taiwan's ProMOS, Kim said, "the situation could change. Hynix will get a sizable amount of compensation from ProMOS over the termination of the technology transfer deal."
But the official declined to give further financial details, such as the amount of the compensation.
Last week, ProMOS of Taiwan said it will not make DRAM chips for the Korean partner as the struggling Taiwanese chip company didn't have enough money to buy manufacturing equipment to produce Hynix's advanced chips.
In 2008, the two firms signed an agreement, which included the Hynix's 50-nanomteer process technology transfer and the acquisition of an 8-percent stake in ProMOS.
The second quarter net loss for Hynix was 50.7 billion won or some $41 million, compared with a 707.8-billion-won deficit a year earlier. The operating loss was 221.2 billion won.