Hynix Q3 High on DRAM

By Jessica Davis -- 10/26/2006

Hynix Semiconductor posted a strong quarter demonstrating a favorable market for DRAM, with revenues up 18 percent sequentially and 23 percent year over year.

The Seoul-based company posted $2.08 billion (1.97 trillion won) in revenues for Q3 , compared with the previous quarter’s $1.77 billion (1.67 trillion won)

Hynix reported operating profit of $479.5 million (453 billion won) in Q3, a 17 percent increase from previous quarter’s $409.6 million (387 billion won) or which resulted in the operating margin of 23 percent, same as previous quarter.

“During the third quarter, a favorable market condition continued for DRAM,” the company said in a statement. “Demand was especially strong from PCs as more Vista-ready PCs are sold, while supply was tight, due to technology migration issues at some suppliers. Meanwhile, NAND flash market showed signs of improvements from August on the back of the launch of new MP3 players and increasing densities for flash cards and USBs.”

Weighted average selling price for DRAM in Q3 increased by 9 percent sequentially, and bit growth increased by 14 percent based on the smooth ramp up of 80nm technology and accelerated volume production of 8” fab in Wuxi, China, Hynix said. For NAND flash, average selling price fell by 24 percent sequentially, and bit growth increased 46 percent quarter-on-quarter, attributable to the expansion of 70nm technology and MLC products.

Despite of the revenue increase of 18 percent sequentially in the quarter, the company’s profits did not improve as much, mainly due to the rapid ramp-up of the China fabs, which incurred significant initial ramp-up cost, and thus had negative impact on the Hynix’s margins, the company said. Nevertheless, due to the successful ramp-up of these fabs, the Hynix’s overseas production has increased significantly, which minimized the impact of the countervailing duties that are imposed in the United States, Europe and Japan.

 

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