Hynix CEO: chip oversupply could last through 2010
SEOUL, Dec 10 (Reuters) - The chief executive of Hynix Semiconductor Inc (000660.KS) said on Wednesday the semiconductor industry was in its worst-ever period and a delay in the sector's restructuring could prolong chip oversupply through 2010.
Kim Jong-kap, CEO of the world's No. 2 memory chip maker, told the evening newspaper, Munhwa Ilbo, that the global semiconductor industry would face a big change such as a closure of a rival chipmaker by the first quarter of next year.
Hynix confirmed Kim's quotes in the daily.
"Memory chip prices have tumbled to below costs for foreign rival companies," he told the newspaper in an interview.
"This could be the first time chip prices have ever fallen this much. A delay in the sector's restructuring could prolong the supply glut through the year after next in the worst case scenario."
Kim said Hynix's request for fresh funding from banking shareholders was not because of liquidity shortages, but to prepare against a worst-case scenario and secure cash and funding for future investment.
Main shareholders of Hynix, led by Korea Exchange Bank (004940.KS), have been in talks to provide 800 billion won ($560 million) of fresh funding to the chip maker, KEB said on Tuesday. [ID:nSEO32157]
Hynix is seeking to slash the number of its executives by 30 percent, cutting its CEO's pay by 30 percent and taking up a voluntary retirement programme.
The global DRAM industry is now in the midst of its worst-ever downturn due to chronic oversupply and a sharp economic slowdown. DRAM (dynamic random access memory) chips are used mainly in personal computers.
ProMOS (5387.TWO), Taiwan's No.3 DRAM maker, has asked for government assistance, a government official said on Wednesday. [ID:nTP40428]
($1=1429.0 Won)
(Reporting by Kim Yeon-hee; Editing by Keiron Henderson)
