Korea Hynix to halt U.S. chip plant for 6 months
SEOUL, July 18 (Reuters) - Hynix Semiconductor 00660.KS,
the world's third largest computer memory chipmaker, announced on
Wednesday it would halt output at its U.S. chip plant for six
months to counter oversupply and collapsing chip prices.
"Facing the worst year ever for the global semiconductor
industry, Hynix Semiconductor Inc today announced plans to
temporarily suspend production at its facility at Eugene, Oregon,
for the next six months effective immediately," the company said
in a statement, adding no further cuts were planned.
Hynix shares rose as much as 10.1 percent in opening trade on
the news, strongly outperforming the benchmark KOSPI <.KS11>.
They had hit a record closing low of 1,685 won ($1.29) on Monday,
prior to a market holiday on Tuesday.
Hynix had hinted for weeks that it might take some action, a
step analysts said other makers would need to follow to address a
severe drop in memory chip prices.
Spot prices on 64-megabit chips have fallen below $1 after
trading around $9 a year ago.
"While we alone cannot dramatically alter the supply
situation in the market, this is a significant reduction for
Hynix," the company said.
Hynix Semiconductor Manufacturing America (HSMA) produces 16
percent of Hynix's dynamic random access memory DRAM wafer output
and over 50 percent of its 64 Mb DRAM chips.
Research firm Gartner Dataquest has said the memory chip
sector is facing its worst year ever, forecasting global DRAM
chip sales to fall 55.5 percent to $14 billion in 2001 from $31.5
billion last year.
TEMPORARY CUTS
Japan's top chipmaker Toshiba 6502.TK and Taiwan's United
Microelectronics Corp 2303.TW UMC have recently announced
temporary output cuts.
But other major DRAM chip producers, including world leader
Samsung Electronics 05930.KS and No. 2 Micron Technology
MU, have said they have no immediate plans to cut output.
Manufacturers are wary of losing market share by cutting back
production, and also of missing the boat if the market bounces
back given the long lead time required to restart lines.
Hynix said about 600 employees at HSMA would be temporarily
laid off for six months but it would maintain staff involved in
upgrading the facility during the shutdown.
"No further cuts are planned, however all operations are
continuously under review to ensure that maximum efficiency is
obtained at all Hynix facilities," the statement said.
The company will invest about $150 million to upgrade the
facility by replacing 0.22 micron processing technology with 0.16
micron technology for 64-megabit chip production. |
