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Seoul (iTers News) - Falling victims to freefalls in the prices of DRAM and NAND flash chips, Hynix Semiconductor Inc. scored the second loss in a row in the fourth quarter of fiscal 2011, but still remained profitable for a whole of 2011. The world’s second largest memory chip maker chalked up an operating loss of 167 billion won in the final quarter of 2011 ended Dec. 31 on revenues of 2.553 trillion won. The 4th quarter revenues rose by 11% quarter-on-quarter, mainly powered by 30% and 24% gains in the shipments of DRAM and NAND flash chips, respectively. But, deteriorations in the prices of those memory chips took a toll on the 4th quarter profitability, forcing the memory chip maker to bleed red ink for the second consecutive quarter. Average selling prices, ASPs of DRAM and NAND flash chips in the fourth quarter tumbled 19% and 17% quarter-on-quarter, respectively. Yet, the chip maker stayed profitable in the fiscal 2011 for the third year in a row, chalking up an operating profit of 325 billion won on revenues of 10.396 trillion won.


Although the yearly operating profit just represents a tiny fraction of what the chip maker earned in 2010, however, it is a sign of how resilient the company is to cyclical ups and downs. Hynix Semiconductor raked in an operating profit of 2.97 trillion in the fiscal 2010.


Other rivals elsewhere in Taiwan and Japan like Elpida, Inotera, and Nanya, are still bleeding money.


Bet on specialty DRAM chips  


Looking forward, Hynix doesn’t expect immediate recovery in memory chip prices, as sagging consumer confidence in advanced countries would continue to depress demand for IT products.


To remain less vulnerable to price plummets, Hynix will turn to more lucrative mobile and graphic DRAM chips as well as NAND flash memory chips for improvements in profitability and revenues.


The migration to a 30nm process technology for DRAM chip production would help to improve the bottom line, too. Especially, Hynix will jerk up the output of NAND flash memory chips as a percentage of total memory chip production, as buoying demand for smart phones and tablet PCs would boost shipments of the non-volatile memory chips.


In doing so, Hynix will spend nearly half of its capital expenditures of 4.2 trillion for 2012 to ramp up production capacity of NAND flash memory chips. As of today, Hynix has a monthly capacity of 130,000 300mm wafers. By year-end, it will ramp up the monthly capacity to 170,000 wafers.


Meanwhile, the chip maker will start mass-production of 20nm node NAND flash memory chips in 2012.


 


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