Feeds

Hynix Q3 loss balloons to $1.3 billion

How long will its creditors hang on in there?

  • alert
  • submit to reddit

Internet Security Threat Report 2014

Much-troubled memory maker Hynix had more bad news for its creditors and investors this morning: its Q3 loss totalled 1.6 trillion won ($1.3 billion) - larger than the company had forecast and well below the 66 million won profit it made this time last year.

In the year-ago quarter, Hynix recorded sales of 2.4 trillion won. This time round, quarterly sales fell to 552 billion won, a fall of 77 per cent.

Hynix has been hit very hard by the collapse in the global memory market. According to market research organisation Gartner, the DRAM business will contract 67 per cent this year. And 2002 won't see any improvement: Gartner reckons the market will shrink a further 19 per cent next year.

Which means Hynix can't expect the market to help it out of its predicament. That leaves it relying even more closely on its creditors. In the light of today's results, they may withdraw their favour.

Hynix is currently asking its creditors for effectively seven trillion won through a mix of further loads, debt reduction schemes and repayment extensions. Creditors have given the memory maker more time to pay off its debts and have agreed to its debt-for-equity plan, but they seem increasingly unlikely to offer it more money.

The level of the biggest creditors' exposure to Hynix suggests they're unlikely to be willing to let it go, but Gartner's gloomy - nay dire - prognosis for the memory market for the next 12 months and more may persuade them that Hynix hasn't a hope of ever paying them back. As it matters now stand, the current bailout plan, even if accepted in full by Hynix's creditors, may prove insufficient to keep the company afloat.

Selling off older production facilities may not help much either. But without the cash, Hynix can't invest in next-generation plant, leaving it behind its competitors when the market does, eventually rebound. ®

Related Stories

DRAM market to shrink 19% next year - Gartner
Hynix creditors meet to ponder $759m loan request
Hynix bail-out plan sets Micron a-grumbling

Providing a secure and efficient Helpdesk

More from The Register

next story
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.