Hynix returns to profit after two years

Hynix Semiconductor, the world’s second-largest memory chipmaker, returned to net profit in the third quarter after two years of losses as industry-wide production cuts boosted chip prices.

The South Korean company made a net profit of Won245.4bn ($207m) compared with a Won1,650bn net loss a year ago. Sales increased 10 per cent to Won2,050bn.

Shares in Hynix have almost tripled since January on expectations of an earnings recovery as chip prices rose more than three times so far this year.

Hynix shares were 0.52 per cent lower at Won18,700 on Friday.

Analysts forecast that higher chip prices would help Hynix post its largest profits in three years in the fourth quarter.

Intel, the world’s biggest chipmaker, last week announced third-quarter results that exceeded estimates and Paul Otellini, its chief executive, predicted growth in global personal computer demand this year.

Earlier this month, Samsung Electronics gave strong earnings guidance for the third quarter, estimating operating profit at between Won3,900bn and Won4,300bn. Samsung is set to unveil results at the end of this month. Earlier this month, Japan’s Elpida Memory also reported its first quarterly operating profit for two years.

Hynix said prices for D-Ram memory, its main products, surged 26 per cent in the July-September period after a 20 per cent rise in the previous quarter. Nand flash memory chip prices rose 4 per cent in the same period.

The company’s turnround comes as creditors holding 28 per cent of Hynix, worth about $2.6bn, are trying to sell their controlling stake to South Korea’s Hyosung Group, the only company to have submitted a bid.

Separately, Chartered Semiconductor Manufacturing, Singapore’s contract chipmaker, said third-quarter net loss narrowed from $24.4m a year earlier to $4.7m. However, sales fell 10 per cent to $415.2m.