Hynix Q2 net profit slumps on weak chip prices

SEOUL: Hynix Semiconductor, the world's second-largest memory chip maker, said Thursday its second-quarter net profit fell 34 percent year-on-year as weak demand for personal computers hit chip prices.

The South Korean firm posted a net profit of 473 billion won ($451 million) in April-June compared to 718.68 billion a year earlier.

The figure was however higher than most analysts' forecasts and an improvement on 273.54 billion won in the first quarter.

Second-quarter operating profit was 446.89 billion won, down 56 percent from the previous year, while sales fell 15.9 percent to 2.76 trillion won.

Chip prices started falling worldwide in the second half of last year as the US economic recovery slowed and eurozone debt problems emerged.

"The second quarter (of 2011) started off with demand growth amid supply concerns resulting from the Japanese earthquake," Hynix said in a statement.

"However, this trend reversed in the latter part of the quarter due to weaker than expected demand from the increasing global economic uncertainties."

Apart from those uncertainties, PC makers face stiff competition from new mobile computing devices such as smartphones and tablets.

Chipmakers are responding by capitalising on the demand for mobile chips.

Hynix said non-PC DRAM (dynamic random access memory) chips accounted for 70 percent of its second-quarter sales and this percentage would be maintained for the rest of the year.

The chipmaker said it expects "challenging" business conditions even in the second half -- when demand typically picks up ahead of the Christmas shopping season -- due largely due to global economic uncertainty.

But Apple's new smartphone expected to be released in the autumn could spur demand for mobile DRAM devices and NAND flash memories, Song Jong-Ho, an analyst at Daewoo Securities, said in a report quoted by Yonhap news agency.

Copyright AFP (Agence France-Presse), 2011