Hynix Sees DRAM Rebound
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LAS VEGAS -- South Korea's Hynix Semiconductor, the world's second-biggest maker of memory chips, expects a rebound in its key computer chip market in the second quarter of this year, its chief executive said on Tuesday.
"Previous cycles in the sector have lasted about 15 months," said Jong-Kap Kim at the Consumer Electronics Show in Las Vegas. "Since the current downturn started in January 2007, we are thinking there may be a likelihood of a rebound in the second quarter."
Hynix and market leader Samsung Electronics have seen prices of dynamic random access memory (DRAM) chips, widely used in personal computers, tumble in 2007 as makers kept churning out the semiconductors despite obvious signs of oversupply and weak demand.
Spot prices of some of the main DRAM chips plunged more than 85 percent in 2007 according to data provided by DRAMeXchange, and in some cases below their cost of production.
Still, in recent weeks, investors and analysts have pointed to signs that memory prices are finally reaching a bottom.
Analysts predict a turnaround for the middle of the year, but any recovery is likely to be muted after a yearlong war of attrition that has savaged memory companies' share prices.
Kim said Hynix, which has a share of around 20 percent in the DRAM market as of the 2007 third quarter, did not plan to reduce its DRAM shipment growth total in 2008. It also planned to keep it in the industry range of a 50 to 60 percent shipment growth for the full year.
"From what I have seen on the floor of the CES, there is a huge number of new products that are going to require memory," he said. "Memory chip demand is likely to be the fastest among all semiconductor categories."
Hynix also expects its 2008 NAND flash-memory shipment growth to be in the 120 percent range, he added.
NAND flash chips are used mostly in portable consumer electronics devices such as digital cameras and music players.
Kim was upbeat about the company's entry into the nonmemory business, saying the unit would start to have an impact on revenue from the fourth quarter of the current year.
In the meantime, the company would focus on profitability in 2008 and is planning to invest slightly less than the 4.8 trillion South Korean won invested in 2007.
"There are no current plans for extra investments," the CEO said. "But investments are necessary in order to compete in the future."
Shares of Hynix dipped 0.22 percent by Tuesday evening against the wider market's 0.65 percent fall.