By Kim Yoo-chul
GOYANG, Gyeonggi Province ― Korea's Hynix Semiconductor is mulling how much it will spend to boost its manufacturing muscle to compete better against larger rival Samsung Electronics in computer memory chips.
Although spending around 3.7 trillion won ($3.3 billion) on facilities will be possible, which would represent a 10 percent increase from the projected investment for this year, uncertainties in the semiconductor market are keeping Hynix from deciding too early, according to the company's chief executive.
"We can either spend 10 percent more on facilities next year or 10 percent less," Hynix CEO Kwon Oh-chul told The Korea Times on the sidelines of the Korea Electronics Show (KES) exhibition in Goyang, Gyeonggi Province, Tuesday.
Hynix, the runner-up DRAM provider behind Samsung, had earlier said that its spending on equipment and facilities next year will amount to 3.38 trillion won, but the mixed predictions on the level of chip rebound after the second-half of 2011 has made the calculations more complex for Hynix.
"An immediate and drastic rise in capital spending on facilities will be unlikely, as a meaningful recovery of the market can only be expected after the start of the second-half of next year," Kwon said, adding that the company's investment plan won’t be finalized until December.
Hynix will likely spend much of its financial wiggle room next year to raise its competitiveness in flash-memory chips that are used in portable devices like smartphones and digital cameras, although Kwon declined to comment specifically on the company’s future business plans.
Kwon also claimed that the company’s third-quarter earnings could be a pleasant surprise to many industry watchers.
The company reported 1.04 trillion won in operating profit for the second quarter, and domestic brokerages are expecting the number to dip to the 900 billion won level due to a sluggish chip market. Hynix will announce its third quarter earnings on Oct. 28.
"Hynix has been receiving more orders from our major set-makers and there has been increasing demand for value-added products such as DRAMs optimized for mobile devices," Kwon said.