UPDATE 1-Hynix Q2 profit more than halves, sees weaker demand in Q3
* Q2 op profit 447 bln won vs consensus fcast of 431 bln won
* Q2 DRAM shipments unchanged vs guidance of low single pct growth
* Sees weak DRAM demand in Q3 due to soft global economy
* Hynix shares up 1.7 pct in flat market (Adds details)
By Miyoung Kim
SEOUL, July 21 (Reuters) - Hynix Semiconductor Inc , the world's No.2 computer memory chip maker, reported on Thursday second quarter profit more than halved from a year ago, hit by feeble demand from computer makers, and expected weaker conditions to continue due to a sluggish global economy.
Analysts expect profits to shrink further in the current quarter as DRAM prices continue to remain depressed, with lackluster demand set to force some chipmakers to cut production.
Contract prices of commodity dynamic random access memory (DRAM) chips declined more than 7 percent in the first half of July alone, and are set to slide further, posing a downside risk to chipmakers' third-quarter earnings.
"Demand growth is likely to be weaker than usual in the third quarter, as customers are delaying purchases due to slow global economic growth," Hynix said in its earnings statement.
The South Korean firm expected its DRAM shipments would grow by a high teen percent in the third quarter and shipment of NAND chips, used in handsets and tablets, to grow by around 20 percent.
Hynix, which competes with sector leader Samsung Electronics Co and Japan's Toshiba Corp , reported a April-June operating profit of 447 billion won ($424 million), versus analysts' consensus estimate of 431 billion won, according to Thomson Reuters I/B/E/S.
The profit more than halved from a year ago's 1.0 trillion won but rose 38 percent from the previous quarter.
Shipment of DRAM chips stayed unchanged in the second quarter, missing its previous forecast of low single digit percentage gain.
The usual seasonal demand upturn in the second half is likely to be subdued, as PC makers have failed to reduce higher-than-normal inventory levels amid weak consumer demand after they inflated stocks sharply following the March earthquake in Japan.
Global PC shipments, which in recent years grew by double digits annually barring 2009 and serve as a key growth driver of the memory chip industry, are set to expand by only 5 percent this year as consumers opt for popular tablets and smartphones.
Hynix shares fell 29 percent over the past three months in a steady wider market , hit by concerns about a slow recovery of depressed memory chip demand.
The stock rose 1.7 percent minutes after the market open versus a 0.1 percent fall in the wider market .
Its shares may stage a rebound as SK Telecom Co and shipbuilding-to-shipping group STX Corp are vying for a $2.3 billion stake in the firm offered by creditors-turned-shareholders.
The potential deal, if successful, will end years of a failure by creditors to find a new shareholder for Hynix and help the chipmaker make aggressive investments to stay ahead in the volatile chip industry. ($1 = 1055.250 Korean Won) (Editing by Jonathan Hopfner)
- Bible left in North Korean sailor's club triggered U.S. tourist's arrest
- U.S. House passes border-security funding bill to speed deportations |
- Tape emerges of Clinton discussing bin Laden day before 9/11 attack
- Exposure of health workers weakens Africa's Ebola fight
- Israel looks for missing soldier; Hamas says he may have been killed |