Hynix Reports Wider-Than-Estimated Third-Quarter Loss as Chip Prices Fall

By Jun Yang - Oct 27, 2011 6:53 AM GMT+0700

Hynix Semiconductor Inc. (000660), the world’s second-largest maker of computer-memory chips, posted a wider-than-estimated third-quarter loss after weak demand for personal computers led to a decline in chip prices.

The net loss was 562.6 billion won ($496 million), compared with a profit of 1.04 trillion won a year earlier, Ichon, South Korea-based Hynix said today in a statement. Analysts expected a loss of 398.5 billion won, according to the median of four estimates in a survey by Bloomberg News.

Hynix and other makers of memory chips known as DRAM have suffered from weakening demand as makers of traditional PCs cut back on purchases, with consumers flocking to mobile devices such as Apple Inc.’s iPad. The South Korean company, on sale by former creditors, is seeking to boost sales with different types of memory used in new mobile devices.

“DRAM prices have fallen so much, and there’s a limit to what they can do no matter how much they try to cut costs and improve their product mix,” Park Hyun, a Seoul-based analyst at Tong Yang Securities Inc., said before today’s announcement.

The company’s operating loss, or sales minus the cost of goods sold and administrative costs, was 276.8 billion won on sales of 2.29 trillion won.