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Hynix Semiconductor, the world’s second-largest memory chipmaker, on Thursday reported a 45 per cent jump in first-quarter profit, but said growth was curbed by lower chip prices caused by a supply glut.

Hynix was upbeat about the second half with Kwon Oh-chul, senior vice president of strategic planning, saying the company had probably hit the low point in terms of market conditions.

”Going forward, we will focus more on Nand supply growth and slow down D-ram supply increase in the second-half,” he told investors during a conference call.

Hynix posted a Won418bn ($450m) net profit in the first three months of this year, compared with Won289bn a year ago. Sales surged 60 per cent to Won2,419bn.

But the results were weaker than the market had expected, mainly because of a 27 per cent fall in prices of D-ram chips used in personal computers and a 44 per cent drop in prices of flash memory chips used in portable gadgets such as digital cameras and MP3 players.

Analysts said Hynix’s margins were still among the industry’s highest. The company boasted operating profit margins of 18 per cent in the first quarter, higher than Samsung’s 12 per cent in its semiconductor division.

Analysts expected Hynix would continue to suffer from weaker chip prices in the second quarter before the prices rebounded in the second half on stronger demand and reduced supply. ”The results will hit the bottom in the second quarter before a recovery in the second half,” said Kim Young-joon at Daishin Securities. ”Nand prices will rebound in the current quarter and D-ram prices will follow suit in the third quarter.”

Hynix forecast D-ram chip prices would fall 30 per cent more in the second quarter while Nand chip prices would rise 20 per cent.

The company said it will invest Won3,800bn in a new domestic plant by July 2009 to expand its 300mm wafer capacity and spend Won792bn in the second quarter on upgrading existing plants.

Separately, South Korea’s anti-trust watchdog said Thursday it dropped an investigation on four chipmakers including Hynix over possible price-fixing of D-ram chips in the domestic market due to a lack of evidence.

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