Micron Adds to DRAM Woes With $706M Loss, Hynix Wins Loan

U.S. DRAM maker Micron Technology has reported a steep loss for its most recent financial quarter due to low prices for DRAM chips worldwide.

On the same day, rival Hynix Semiconductor of South Korea was granted a loan of 800 billion Korean won (US$600 million) from a group of its creditors, intended to help it weather the global financial crisis and the DRAM downturn.

Micron reported a net loss of $706 million for the three months ending Dec. 4, worse than the $262 million loss it posted for the same quarter last year. Sales at the company came in at $1.40 billion, down from $1.54 billion last year.

Micron said it sold more chips in the quarter but that low prices pushed it to a loss. Average selling prices for Micron's DRAM chips fell 34 percent over the quarter, while they declined 24 percent for NAND flash memory products.

Hynix received a pledge for 800 billion won, including 500 billion won in cash and support for a 300 billion won stock sale, according to a statement by its largest creditor, the Korea Exchange Bank.

The creditors will also allow Hynix to delay repaying loans. All Hynix loans owed to the group of creditors will see their maturity dates pushed back to the end of 2009.

Hynix, the world's second largest DRAM maker, had asked its creditors for a loan of between 500 billion and 1 trillion won.

Like other makers of DRAM computer memory chips, Hynix has found it difficult to obtain new loans amid the global credit crunch. And DRAM makers are starving for cash after a year-long price slump has left their finances in tatters. Prices remain near all-time lows, though they have received a slight boost recently because companies have curtailed production.

So far this year Hynix has announced the closure of five older chip factories, slashed its capital spending forecast and said it will cut the number of its top executives by nearly a third while reducing executive salaries by 10 percent to 30 percent.

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