April 21, 2006 – Hynix Semiconductor Inc. reported 1Q06 profits of about $315.1 million, down 61% sequentially, on 18% lower sales of about $1.55 billion. Compared with a year ago, profits were down nearly 9%, despite 14% higher sales. The main cause of the big slide in net income was recognition of deferred tax assets in the prior quarter, amounting to nearly $485 million.

The company blamed the sales decline in part on a strong Korean won, which had appreciated 5% vs. the US dollar, as well as a decline in ASPs for DRAM and NAND flash memory as slow seasonality offset bit growth. The company’s weighted ASP declined by approximately 9% during the quarter, despite strong pricing for 512Mb DDR2.

ASPs for NAND flash sunk 29% sequentially. Revenue contribution from NAND flash declined to 36% of total revenue from 40% in the previous quarter.

Operating profit was down 31% sequentially to about $385 million, for margins of 25%. The dropoff was due mainly to “severe price erosion” again caused by the strong Korean won.