UPDATE 1-Hynix sees H2 turnaround, may slash 2008 capex

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ICHEON, South Korea, April 20 (Reuters) - Hynix Semiconductor Inc (000660.KS: Quote, Profile, Research, Stock Buzz), the world's No. 2 maker of memory chips, does not see further drops or rises in prices of computer memory this quarter and expects improvement in the market in the second half, its chief executive said.

"There is little likelihood of a further drop in prices," said Kim Jong-kap, referring to the DRAM market, "and we are hoping for an improvement in the market in the second half, thanks to continued strength in demand for notebooks and the impact of investment cuts."

Kim's remark, made at a media event on Friday, had been embargoed for Sunday.

Makers of dynamic random access memory (DRAM), used mainly in personal computers, have seen their profitability savaged by a severe glut and slower PC demand, which has driven down the price of some key chips by ore than 90 percent since early 2007.

Underscoring the chip makers' difficulties, Japanese rival Elpida Memory Inc (6665.T: Quote, Profile, Research, Stock Buzz) on Friday warned of an operating loss nearly twice as big as the market consensus, blaming the DRAM tailspin.

All memory chips makers, including market leader Samsung Electronics Co Ltd (005930.KS: Quote, Profile, Research, Stock Buzz), are expected to show poor to dismal results for the first quarter.

Kim said Hynix was considering reducing its 2008 capital investment by 1 trillion won ($1 billion), from an initially announced total of 3.6 trillion won, but he added that no decision had yet been made.

"We will make a decision depending on the situation in the second half," Kim said.