Hynix puts Q2 loss at $204 million

Hynix has shut its plant in Oregon and is moving its headquarters to San Jose

SEOUL, South Korea -- Troubled chip maker Hynix Semiconductor on Thursday said it lost $204 million (266 billion won) in the second quarter.

The loss, which is before taxes and interest, is a sharp deterioration from the Korean company's first quarter, when it lost 68.7 billion won.

That sent its stock tumbling to its lowest level yet. Hynix was trading down 9.7 percent at 1,525 won in mid-morning trading. It sank as low as 1,495 won after the announcement.

That means the stock has lost 78 percent of its value since its 2001 high in January. Long term, its decline has been even more dire.

Second-quarter sales fell 34 percent to $888 million (1.2 trillion won) from the first quarter. Hynix did not release net income numbers.

Trimming production

Hynix said Wednesday it has frozen production at its U.S. factory, in Eugene, Oregon, for six months.

It blamed the decision to shutter its American plant, which also involves temporarily laying off 600 workers, on a chip industry that is facing its "worst year ever."

The company is also spending $150 million on better equipment at the plant. It spends more to make its chips than its competitors because its production operations aren't first-rate, analysts say.

Hynix said Monday it would move its headquarters to San Jose, California. Most of its customers are based in the United States. They include Hewlett-Packard, IBM and Apple Computer.

The former Hyundai Electronics said it would shift 150 employees from its current base in Seoul to San Jose.

Hynix is the world's third-largest memory-chip maker, behind Korea's Samsung Electronics and U.S.-based Micron Technology.

It is trying to work its way out of a huge debt load, and has to contend with $4.3 billion (5.7 trillion won), or 70 percent of its total, coming due this year.

Research firm Gartner Dataquest predicts the market for the dynamic random access memory chips that Hynix makes will fall by half this year, to $14 billion from $32 billion in 2000.

DRAM prices are down 90 percent this year.

Many Asian chip makers are shutting production for part of the northern summer, faced with a slump in computer sales worldwide.

Japanese flash-chip maker Fujitsu Ltd. joined Toshiba Corp. and Hitachi Ltd. in trimming production. NEC Corp. is considering a similar move.

But despite Hynix's poor numbers, Samsung Electronics stock, the largest in South Korea, was rising Thursday.

Samsung was up 3.0 percent at 172,500 won on Thursday morning.