Hynix Shares Surge on Hopes for New Credit

Shares of Hynix Semiconductor traded sharply higher early Wednesday after one of its creditors announced a plan to extend up to 800 billion Korean won (US$552 million) in funding to the company.

Hynix, the world's second largest DRAM maker, had asked its creditors for a loan of between 500 billion and 1 trillion won. The company's largest creditor, the Korea Exchange Bank, said it is working with other creditors on a deal for 800 billion.

Hynix shares surged 9 percent early in Seoul, but slipped lower as the day progressed.

Like other makers of DRAM computer memory chips, Hynix has found difficulty obtaining new loans amid the global credit crunch. And DRAM makers are starving for cash these days after a year-long slump has left their finances in tatters. The price of DRAM chips remains at all-time lows and could go lower in coming weeks as consumers finish buying new PCs ahead of the holidays.

Hynix has so far this year announced the closure of five older chip factories, slashed its capital spending forecast and said it will cut the number of top executives by nearly a third while reducing salaries for executives by 10 percent to 30 percent, said Seong-Ae Park, corporate communications representative at Hynix.

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