Report: Hynix slashing 2008 capex, 300mm plans unaffected

Mar. 27, 2008 – The latest casualty in the memory sector slump appears to be Hynix, which is about to shave more than a quarter off its planned 2008 investments in 2008, with late-year investments now cast in doubt, according to local reports.

Citing unnamed “industry sources,” the Korea Times says Hynix is cutting its estimated 2008 capex by ~28%, amounting to a decrease of ~1T won (US $1.02B) from a total 3.6T won ($3.67B) budget. “We are weighing the possibility but the size of the reduction will depend on the market situation,” according to a Hynix spokesperson quoted by the paper.

According to the report, planned investments of 2T won ($2.03B) for Hynix’s 300mm M11 line in Cheongju, and a 300mm ramp at its C2 line in Wuxi, China, will proceed as planned in 1H08. The changes will apparently affect the company’s 2H08 investments (currently pegged at 1.6T won/$1.63B), which the company will finalize “after checking market conditions,” the paper noted.

Expanding its contract foundry business (including recent deals for image sensors and mobile chips) has helped offset ongoing softness in Hynix’s core memory operations, but it’s still struggling to slow the drain from profits, the paper said — noting that an 8Gb NAND flash chip, which cost $8 last fall, now costs just $2.70.


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