Tag: hynix

Hynix hits new low

South Korean chipmaker Hynix Semiconductor is seeing its business drop down the loo after  a wider-than-estimated third-quarter loss.

The outfit, which is the world’s second-largest maker of computer-memory chips, saw chip prices plummet and suffered from a weakening of the South Korean currency.

The outfit lost 562.6 billion won, which is $496 million in American money. This is compared with a profit of 1.04 trillion won a year earlier and a couple of billion won worse than analysts expected.

According to Business Week,  Hynix and other makers of memory chips known as DRAM have suffered from weakening demand as traditional PCs wane.

All this was happening the outfit, which was was put on sale by former creditors, is trying to increase its sales with different types of memory used in new mobile devices. It has also attempted to slash production costs by using advanced technologies.

But the problem is that DRAM prices fell fast, and there was a limit to what the outfit could do to cut costs.

The weaker South Korean won walloped the outfit’s bottom line and caused a 250 billion won foreign-exchange loss. This was bad for Hynix, which has $4.4 billion worth of debts in foreign bank accounts.

Shares in the company fell 2.1 percent on the back of the news.

The company’s operating loss, or sales minus the cost of goods sold and administrative costs, was 276.8 billion won on sales of 2.29 trillion won. 

Apple iPhone 4S ripped apart

The analysts have had fun tearing an iPhone 4S apart, showing not only its entrails but the bill of materials (BOM) for the unit.

IHS said that the bill of materials amounts to $188 for the 16GB version, and Apple is playing the volume game here, because the retail price with contract for this number is only $199.

Margins for the 32GB and 64GB versions are much better, with the BOM for the former being $207 and its retail price $299. The 64GB version has a bill of materials of $245 and sells for $399, IHS said in its teardown.

In the process of breaking the phone, IHS also analysed the components used in its manufacture.  The 4S uses Hynix NAND flash memory – the analysts signal that in previous times, before the mobile patent wars, the NAND was Samsung manufactured. Apple must have run out of the tremendous stockpile it built up years ago.

Andrew Rassweiler, senior director, teardown services, for IHS, said the 4S is ringing in some changes: “Key among these changes is a custom part from Avago that helps give the iPhone 4S its unique capability to be used in multiple wireless systems globally, while still keeping costs down. In another surprise development, the 4S employs a Hynix NAND flash memory device. While IHS has already confirmed multiple suppliers for this part, it does mark the first time that IHS has identified a Hynix NAND flash in an iPhone, as opposed to devices from Samsung Electronics Co. Ltd. or Toshiba Corp. seen in all previous iPhone and iPad teardowns.”

Apple has a dual mode system to support different standards such as CDMA and HSPA.

Jury still out in Hynix, Rambus case

The jury is still out trying to work out if Hynix Semiconductor and Micron Technology conspired to push Rambus out of the memory-chip market.

Yesterday it asked to have a look at the trial testimony of Farhad Tabrizi, a former Hynix executive.

According to California Superior Court Judge James McBride, the jury was very interested in Tabrizi’s testimony.

Tabrizi claimed he was “pressured to become more upbeat about” Rambus-designed dynamic random access memory chips, or RDRAM, at a May 2000 chip industry forum. Rambus lawyers questioned Tabrizi, a former Hynix vice president of worldwide marketing, “extensively” about whether his enthusiasm was “genuine.”

Tabrizi was not the most terse witness, the judge said, and he “tended to fold in a lot of topics in any answer,” which produced objections from lawyers during the trial, McBride said.

Rambus claims that Micron and Hynix colluded to cut the prices of their own SDRAM, or synchronous dynamic random access memory chips and deserted their commitment to produce RDRAM, relegating it to a niche role.

It thinks it could have earned $3.95 billion in royalties without the alleged conspiracy. Under California law, a jury finding of damages in that amount would be automatically tripled to $11.9 billion.

Hynix and Micron told the court that Rambus has only itself to blame for the flaws and production delays that led to the failure of its product to become an industry standard.

According to Business Week, Tabrizi was asked whether he was promoted to vice president of worldwide marketing after engaging in a campaign from 1995 to 1998 that he called “RDRAM killing.”

Tabrizi told the court that the term meant that he promoted an “open standard” for DRAM in opposition to Rambus’s proprietary and licensed product.

However, Rambus lawyer Bart Williams waived a 1998 e-mail under his nose in which Tabrizi responded to an Intel request for Hynix’s estimates of its quarter-by-quarter RDRAM production. “My recommendation is to show bigger number than the actual plan, maybe even two to three times,” Tabrizi wrote in the message.

Tabrizi testified that, if he provided Intel with the actual production numbers, Intel would have produced fewer processors compatible with RDRAM. He claimed that Chipzilla wanted to create an over-supply of RDRAM so the prices went artificially low. He said he did not want to give that pleasure to Intel.

Tabrizi admitted that it was possible during an October 1998 meeting that he told representatives of other chip manufacturers, including Micron, to overstate RDRAM production. 

450mm wafers set to polarise semi industry

There will be clear winners and losers in the semiconductor market once the big players adopt 450mm wafers over the next few years. And the biggest losers are set to be the Taiwanese DRAM manufacturers, according to Malcolm Penn, CEO of semi market research company Future Horizons.

Intel, Samsung, TSMC, IBM and Global Foundries are followers of the Global 450 Consortium announced at the end of last month, and AMD will probably be forced to follow, said Penn.

But others probably can’t bear the expense. Sandisk and Toshiba will likely be forced to follow or suffer the slings and arrows of a Samsung waving its 18 inch wafer.

Penn said that the motivations for investing in 450mm wafers for the big players are clear. Once everything is up to scratch, the players will see a 30 percent die cost reduction as well as increased wafer capacity demand. The third reason, which no players will acknowledge, is to kill the competition.

The big five Taiwanese DRAM makers – Nanya, Inotera, Powerchip, ProMOS and Rexchip are at least one process node behind Samsung, and together owe $15 billion. Although they have 30 percent of total industry capacity, Penn said that they are trapped in a DRAM “valley of death”. Flash manufacturers are, however, in a “roses, roses” situation right now.

But, Penn said, even the mighty Intel doesn’t know what capacity it might need in three years’ time. There are several possibilities as to what might happen according to Penn. Micron could take a bigger share in Nanya, while Elpida could swallow up Rexchip and grab a bigger stake in Powerchip. He said that next year could prove to be a do-or-die year for the Taiwanese manufacturers, while the future of Hynix is currently unsure.

Hynix sale continues despite STX back off

Those involved in the auction of Hynix Semiconductor are rushing around trying to find more interested bidders after STX backed out last week.

According to Reuters, if new bidders cannot be found for the world’s second biggest memory chipmaker,  mobile carrier SK Telecom will be the only one left.

Shareholders have been trying to flog the outfit off and have not been having much in the way of luck. Shareholders have scaled down their stake in Hynix but failed several times to complete a full sale. Investors are not keen to jump into the capital intensive, cyclical memory chip sector, particularly as the world mutters about recession.

Now the lead shareholder Korea Exchange Bank said it would allow new bidders to participate in the stake sale in the interests of valid competition.

Up for grabs is 146.1 million shares which should be worth about $2.5 billion. The sale was supposed to happen in late October, but with SK Telecom ruling itself out, it might be delayed. If new buyers can be found, then they will have to inspect the company books, which will take a bit of time.

SK Telecom had a seven-week inspection and then fled to the hills. 

Hynix finds itself in one-party auction

Hynix, in its attempt to sell itself to the highest bidder, only has one option left – as STX gave up because of an uncertain market.

The deal is thought to reach $2.7 billion and SK Telecom is the only interested party left. SK owns South Korea’s mobile carrier market and is in talks with Hynix about price already. As the Wall Street Journal reports, industry watchers believe another bidder is unlikely. 

STX Group said it simply doesn’t have the time or the resources to commit to Hynix. In a statement, STX declared it “burdensome” for the group to continue investing in memory and non-memory chip facilities. Not only that, but the umbrella company, which has its fingers in many different pies, suggested its Abu Dhabi partner Aabar was acting up on the deal.

Dropping Hynix has boosted its shares, while SK and Hynix saw the stock market cast an unfriendly gaze over both, dropping 3.5 percent and 4.1 percent respectively.

The deadline is fast approaching, with a date set for final bids at 24 October. That’s when Korea Exchange Bank will make up its mind about whether or not to let the sale go through.

At the moment, it’s looking like poor Hynix is still struggling to find that all-important buyer, and anyone who goes near the sale is being punished in the markets. 

Rambus calls foul on Micron and Hynix

Rambus was in court again, only this time it was not suing someone for violating its patents.

According to Reuters, Rambus’s laywer Sean Eskovitz was making the more interesting claim that Micron and Hynix had conspired to squelch his outfit’s superior chip technology and keep it from becoming an industry standard.

Of course Micron and Hynix are claiming that “RDRAM” memory chip technology failed because it was inferior and Rambus is looking for someone to blame.

The war between the three has been going on for years. Rambus is suing to claim some $3.95 billion in lost profits. That figure was scaled back from $4.38 billion after Rambus accepted the defendants’ arguments that discounts would have applied.

Eskovitz said that Rambus should have won the race with its RDRAM chip, but the defendants cheated by conspiring to lower their prices and drive Rambus out of the market.

Rambus has also moaned that Micron and Hynix boycotted its memory technology and that Samsung also joined in to restrict production and raise the price of Rambus chips in favour of its own technology.

Samsung is out of the picture now because Rambus settled its antitrust claims with the outfit in a deal worth $900 million.

Eskovitz showed the court memos from Intel saying Rambus’s technology was superior. And he played video of Micron chief sales executive Mike Sandler admitting that he had had “improper” conversations with Hynix.

In a US Department of Justice hearing, Hynix pleaded guilty to price-fixing, he pointed out.

Micron and Hynix deny any anticompetitive conduct and say Rambus had encountered technical and design problems that prevented the technology’s wider adoption.

Intel gave up on Rambus’s RDRAM in 1999 in favor of SDRAM – before the alleged collusion against Rambus had taken place. SDRAM became the widely adopted industry standard.

Hynix attorney Kenneth Nissly told the court that Rambus’s choices doomed the product.

As a result Rambus was unable to compete fairly and decided to take up a new life as a patent troll. We have to admit that this does tend to cause Rambus to lose a lot of sympathy. 

Mobile DRAM worth over $2 billion in Q1

Smartphones, tablets and gaming gizmos are fuelling sales of DRAM for mobile devices, making that sector worth over $2 billion in the first quarter of this year.

That’s according to IHS, a US based market research company, which said that sales amounted to $2.07 billion – up 10 percent for the same quarter in 2010.

According to Ryan Chien, researcher for memory and storage at IHS, shipments and densities of mobile DRAM will continue to grow – as much as a factor of six between 2010 and 2015 for smartphones.

Densities will increase eightfold for handsets. But the position is even better for the manufacturers for the tablet market. Chien expects that DRAM densities for these devices will grow 14-fold in the same period.

The demand for mobile DRAM means new entrants into the vendor yard – Winbond and ProMOS are increasing production. But they will be hard pressed to topple Samsung, Hynix and Elpida – those three account for nearly 95 percent of mobile DRAM shipments. Samsung, Elpida and Hynix are followed by US company Micron, Winbond and ProMOS.

Revenues for mobile DRAM will be close to $7 billion for the calendar year 2011, while conventional DRAM expected to fall by 10 percent as companies are not in any hurry to increase densities in PCs.

mobile dram Q1 2011

NAND memory suffers as oversupply kicks in

The price of branded NAND Flash fell by nine percent overall in the second quarter of this year as the curse of the semiconductor market, oversupply kicked in. That decrease is compared to the same quarter last year.

That’s according to a report from DRAM Exchange, which said, however that sales of NAND for tablet PCs and smartphones continued to be strong.

King of the NAND hill was Samsung (40.1%), followed by Toshiba (27.8%), Hynix (13.1%), Micron (11.3%) and Intel (7.7%).

Overall, market shares amounted to $4.88 billion.

Toshiba, not unnaturally, was affected by the earthquake in mid-March.  Intel, said DRAM Exchange, will start shipping 20 nanometre products in the second half of this year.

Hynix profits drop 34 percent

Hynix Semiconductor has announced a slump in profits as the memory chip industry struggles with slow demand.

The South Korean company posted second quarter results of $488 million net profits, showing a 34 percent drop compared to the same point last year.

Revenues also dropped, with a 16 percent decline over the year.

The firm put this down to slowly growing demand, with other DRAM makers such as Nanya and Inotera posting declines too.

Despite the effects of the Japanese earthquake disruption pushing demand up briefly, economic instability across the globe has seen the trend reversed, says Hynix.

From the previous quarter, DRAM bit shipments were flat, with an average selling price decline of one percent. NAND flash shipments rose 36 percent, while the ASP dropped by 19 percent over the same period of time.

Like other memory makers, Hynix plans to look towards 30 nanometre process products in a bid to drive demand in the near future.

This could lead to more activity in the consumer PC market which has been lacklustre of late, and Hynix looks set to increase its 30nm output by 40 percent by the end of the year.

Hynix has also planned to start mass production of it next gen 2Ynm class process in the second half of this year.