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Hynix Semiconductor profit declines 66 per cent in 1st quarter, sales fall(Canadian Press DataFile Via Acquire Media NewsEdge) SEOUL, South Korea _ Hynix Semiconductor's net profit fell 66 per cent in the first three months of this year as sales declined and prices for memory chips remained weak, though the company said that business conditions in the current second quarter should improve. Hynix, the world's second-largest manufacturer of computer memory chips, earned 273.5 billion won ($254.9 million) in the three months that ended March 31, the company said in a regulatory filing Thursday. That compared with net profit of 808.1 billion won a year earlier. Sales in the first quarter fell 1.1 per cent from a year earlier to 2.79 trillion won. ``The business environment was very challenging as weak DRAM pricing and global economic uncertainties persisted throughout the quarter,'' Kim Min-chul, Hynix's chief financial officer, told analysts on a conference call, referring to dynamic ransom access memory chips, used mostly in personal computers. Investors appeared optimistic, however, sending Hynix's share price 3.1 per cent higher to 34,950 won in morning trading. Hynix announced earnings shortly before the stock market opened. Hynix Semiconductor Inc. ranks No. 2 globally in DRAM chips behind South Korean rival Samsung Electronics Co. It also ranks No. 4 in NAND flash memory chips used in products such as digital cameras, music players and smartphones. Hynix said its average selling price for DRAM chips fell 13 per cent in the first quarter from the final three months of last year. Shipments, however, increased 15 per cent. The company said its average selling price for NAND flash memory chips, meanwhile, was flat, while shipments also increased 15 per cent. Kim Ji-bum, Hynix's chief marketing officer, said that demand for chips used PCs was weaker than expected during the first quarter as manufacturers reduced inventories amid slower-than-expected demand for personal computers from consumers. He added that Hynix expects that its chip customers will replenish inventories during the current quarter amid worries about possible supply shortages due to the massive March 11 earthquake in Japan. Japanese companies are key suppliers of high-tech materials and components. ``Demand for NAND flash was stronger than our expectation of normal seasonability in response to strong market demands for smartphone and tablet'' devices in the first quarter, Kim told analysts, adding that the market environment should be ``stable'' in the second quarter as DRAM customers, also concerned about possible supply disruptions, likely move to secure supplies. Kim also said that while Hynix currently sees no ``significant supply chain disruptions'' as a result of Japan's disaster, that could change in the second half of the year if supply constraints for raw materials and components linger longer than expected. ``Therefore, we still remain cautious on the long term impact of (the) earthquake,'' he said. Separately, Hynix said it adopted international financial reporting standards, or IFRS, from the first quarter of this year and has restated previous earnings to conform. (c) 2011 The Canadian Press |