Favorable DRAM market in the fourth quarter of 2006 as well as the contribution from its Wuxi, China fabs, jointly boosted Hynix Semiconducctor's quarterly profit by 166% on quarter.

Hynix reports its consolidated revenues grew by 33% on quarter and 48% on year to 2.61 trillion won in the fourth quarter of 2006. Operating profit margin grew by 10 percentage points on quarter to 33% in the fourth quarter. Net profits for the fourth quarter rocket by 166% sequentially and 11% on year to 1.04 trillion won. Hynix attributed the margins growth to strong DRAM pricing that was sustained throughout the quarter and also by the company's China operations, which turned profitable.

Favorable market conditions for DRAM exists with demand being especially strong from PCs as more Vista-ready PCs are sold, Hynix explained. Supply was tight at the same time since some of its competitors had unresolved technology migration issues, the company added.

The company said its DRAM ASPs increased by 9% with bit growth reaching 31% based on the smooth ramp up of 80nm production and accelerated volume production at its Wuxi, China fabs.

Demand for NAND flash, however, slowed down again in the second half of the fourth quarter due to worse than expected sell-through of end applications. Hynix saw NAND flash ASPs drop by 11% on quarter with bit growth reaching 27%.

Sales breakdown by products were 25% for NAND flash and the remainder for DRAM. Hynix recorded its DRAM production by sales contributed by 5 percentage points more on quarter at the expense of reduction of NAND.

By: DocMemory
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