Buoyed by booming sales, Hynix is set to increase its spending on new chip-making equipment by 29 per cent this year, the company's CEO, Woo Eui-Je, said today.

Cited by Korean business newspaper Joong Ang Daily, Woo said this year's capex budget will rise from KRW1.4tr ($1.2bn) to KRW1.8tr ($1.6bn).

The announcement follows a record-breaking second quarter, which saw the once-troubled memory maker report net income of KRW620bn ($542m) on sales of KRW1.7tr ($1.5bn). The company still has a big financial debt owed to its creditors, albeit much reduced by recent debt-to-equity transactions. It is banking on ongoing sales and income growth to fund the increase in capital spending.

That growth will come, the company believes, from higher memory prices.

Separately, Hynix said the sale of its non-memory products manufacturing business to a Citigroup Venture Capital Equity Partners will be completed by the middle of October 2004. Shareholder opposition delayed the deal, which was supposed to complete in August 2004. ®

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