Seoul, January 31, 2007
hynix Semiconductor Inc. (‘hynix’, ‘the Company’, www.hynix.com) today announced the earnings results for its fourth quarter 2006, ended December 31, 2006.
The Company recorded the consolidated (which is the consolidation of the Company and its overseas subsidiaries) revenues of 2.61 trillion won which is a 33% increase compared to the previous quarter’s 1.97 trillion won, and a 48% increase from 1.77 trillion won in the same period last year.
During the fourth quarter, a favorable market condition continued for DRAM. Demand was especially strong from PCs as more Vista-ready PCs are sold, while supply was still tight which we believe was due to the unresolved technology migration issues at some of our competitors. Meanwhile, NAND flash market improved significantly during the first half of the quarter due to the demand increase from MP3 players, but then started to slow down again in the second half of the quarter due to the worse than expected sell-through of the end applications.
Under such market environment, the Company’s weighted average selling price for DRAM in the fourth quarter increased by 9% sequentially while bit growth increased by 31% based on the smooth ramp up of 80nm technology and accelerated volume production of fabs in Wuxi, China. For NAND flash, although the average selling price fell by 11% sequentially, bit growth of 27% was enough to offset the price drop.
Fourth quarter operating profits recorded 858 billion won, up by 89% quarter-on-quarter, with 33% of operating profit margin, which increased by 10 percentage points compared to previous quarter. This improvement in the margin was mainly attributable to the strong DRAM price that was sustained throughout the quarter and also by the China operation that turned profitable.
Ordinary profits recorded 917 billion won, up by 142% quarter-on-quarter, from 379 billion won in the previous quarter. Net profits for the fourth quarter increased 166% quarter-on-quarter to 1.04 trillion won, with 40% net profit margin. The reason for the difference between the ordinary profits and net profits is basically due to the additional recognition of tax benefit by the parent company at the end of the year. As a supplement to the consolidated financial results, non-consolidated sales in the fourth quarter recorded 2.66 trillion won, which is a 46% increase sequentially. Operating profits increased by 202% quarter-on-quarter to 881 billion won, resulting 33% of operating profit margin. Ordinary profits recorded 849 billion won after reflecting net non-operating expense of 32 billion won. Net profits recorded 1.01 trillion won with 38% of net profit margin.
Please note that the financial results discussed herein are preliminary and speak only as of December 31, 2006. Readers should not assume that this information remains operative at a later time. In addition, this information may include forward-looking statements that involve a variety of risks and uncertainties that could cause actual results to differ materially. For further discussion of these risks and uncertainties, readers should refer to hynix Semiconductor Inc.’s filings with the Korea Exchange. This document is neither an offer to sell nor a solicitation of an offer to sell any security of hynix. hynix securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended.
About hynix Semiconductor Inc.
hynix Semiconductor Inc. (HSI) of Icheon, Korea, is the world’s top tier memory semiconductor supplier offering various Dynamic Random Access Memory chips (“DRAMs”) and Flash memory chips to a wide range of established international customers. The Company’s shares are traded on the Korea Stock Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about hynix is available at www.hynix.com.
