Losses pile up at DRAM maker Hynix
Hynix Semiconductor reported its fifth straight quarterly loss on Thursday, as a chip glut and ebbing computer demand sent prices down in the fourth quarter of last year.
The company's net loss ballooned to 1.33 trillion Korean won (US$964.4 billion) in the fourth quarter last year, from 462 billion during the same quarter a year earlier. Hynix's sales fell to 1.51 trillion won, it said in a statement.
Hefty loss reports by DRAM makers have become regular occurrences in the face of DRAM oversupply and falling demand. Last month, German DRAM maker Qimonda filed for bankruptcy protection, and analysts fear more memory chip makers may face a similar decision.
Hynix's quarterly loss was further affected by currency exchange rates, the company said, as the Korean won weakened while the company had to pay back debt in U.S. dollars.
Hynix's net loss for the full year 2008 reached 4.38 trillion won (US$3.18 billion).
Loans from creditors are helping keep Hynix operating for now. In December, the company gained a 500 billion won cash loan and promises to push back debt repayments to some creditors until the end of 2009.
Most makers of DRAM computer memory chips have found it difficult to obtain new loans amid the global credit crunch. The companies are starving for cash after a year-long price slump has left their finances in tatters. DRAM prices remain low but have recently risen a bit because of Qimonda's announcement and production cutbacks across the industry.
Hynix last year announced a series of measures to help it conserve cash, including the closure of five older chip factories, reduced capital spending and plans to cut a number of executive positions as well as a reduction in executive salaries by between 10 percent and 30 percent.
The company's main global partner, Taiwanese DRAM maker ProMOS Technologies, recently asked creditors for an NT$5 billion (US$149 million) loan to help it meet expected debt payments next week. The company has not yet announced the fate of the loan.