Hynix to focus on NAND chip production

SEOUL: South Korean chipmaker Hynix Semiconductor Inc. expects growth in world personal computer demand to slow in 2006 and plans to focus on NAND chip production, its chief executive said on Tuesday.

Companies like Hynix and Micron Technology Inc. are trying to cut their reliance on the volatile market for DRAM chips, mainly used in PCs, and instead broaden product lines to include flash memories for digital music players and cameras.

Hynix is the world's third-biggest maker of NAND flash memory chips, following industry leader Samsung Electronics Co. Ltd. and Japan's Toshiba Corp. It ranks second in the DRAM market behind Samsung.

"We expect corporate investment in information technology goods to fall from 2005 and the growth in the market for PC and other devices to slow," Hynix CEO Woo Eui-jei said in his New Year message, provided by the company.

"We need to strengthen our NAND flash memory chip business and expand strategic alliances (with other makers) to flexibly cope with volatile market conditions."

In November, Micron and Intel Corp., the world's biggest maker of computer chips and microprocessors, announced a plan to set up a $2.4 billion flash memory joint venture.

Despite falling DRAM prices, investors are optimistic about chip makers' earnings prospects as explosive demand for NAND flash memory chips offset worries over the weaker DRAM market.

Shares in Hynix fell 0.13 percent to 37,550 won ($37.09) by 0410 GMT, compared with the wider market's 0.2 percent fall. The stock jumped 61 percent in December.