UPDATE 1-Hynix believes Q4 2008 bottom of DRAM downturn-CEO

(Adds details, background)

SEOUL Jan 12 (Reuters) - Hynix Semiconductor (000660.KS), the world's No. 2 memory chip maker, said on Monday it believed the fourth quarter of 2008 was the bottom in the ongoing memory chip downturn, and that it was open to further financing.

"Although we do not expect any rapid recovery, we are cautiously hopeful that the fourth quarter (of 2008) may have represented a bottom in the downturn," Hynix CEO Kim Jong-kap said during a news conference.

Hynix, which last month secured $600 million in much needed funding and is set to raise $249 million in a new share issue under the support package, has no immediate plans to secure further liquidity, Kim said.

"But we are open to the possibility of new fundraising, depending on the market," Kim said.

"The timing and size of any further fundraising would have to be discussed with our major shareholders."

Although some analysts have said the amount recently raised would only help Hynix last a few more months, Kim expressed confidence that the company would weather the downturn thanks to more drastic cost-cutting and reduced investments.

"In terms of our investments for 2009, we are leaning towards a figure closer to 1 trillion won ($735 million) than 2 trillion won," Kim said.The number would be a sharp contrast to 2007, when the profit-making company invested a total of 4.8 trillion won.

An unprecedented downturn in the market for dynamic random access memory (DRAM) chips, used mainly in personal computers, has pummelled Hynix and its rivals such as Germany's Qimonda QI.N and Taiwan's Powerchip Semiconductor (5346.TWO), forcing them to cut back output and seek outside funding help.

Hynix in October reported its worst quarterly net loss in nearly 8 years and is set to report another steep loss for the fourth quarter.

Even sector leader Samsung Electronics (005930.KS) is forecast to incur losses in the past and current quarters as memory chip prices plunged below cash costs for all players.

Kim pointed that the dramatic drop in investment across the industry was expected by some to spur a shortage situation as early as next year.

HOPEFUL ON PROMOS

Kim also expressed hope that Hynix could continue its existing partnership with ProMOS (5387.TWO), Taiwan's No. 3 DRAM maker, which in November submitted a request for government assistance jointly with Japan's Elpida (6665.T). Local media have said ProMOS was likely to end its alliance with Hynix in favour of Elpida as one of the Taiwan government's conditions for help.

In the event the partnership came to an end, the impact would be relatively small, Kim said.

"ProMOS only represents less than 5 percent of our total output," he said.

Hynix, he said, is not particularly worried about the growing drive towards consolidation in the DRAM industry.

"The trend will continue," he said. "But we are confident we can maintain a technological advance of about one year against our smaller rivals," Kim said, adding that the company would spend 10 percent of its total revenue on research and development in order to maintain that advantage.

Global sales of DRAM chips are expected to fall 4 percent in 2009, extending their decline for the third straight year, research firm iSuppli said last week.

Sales of DRAM chips are forecast at $24.2 billion in 2009, down from $25.2 billion in 2008, it said. DRAM revenue dropped 20 percent in 2008 and 7 percent in 2007. ($1=1360.4 Won) (Reporting by Marie-France Han, editing by Jacqueline Wong)