Hynix Semiconductor Rejoins Ranks of Healthy Korean Firms

When the Hyundai Group split into a number of separate divisions in 2000-2001 many of its subsidiaries were suffering from the ills of the 1997 Korean fiscal meltdown era--high debt and huge losses.

Some divisions like the Hyundai Automotive Group recovered quickly, and wisely a number of the Hyundai Group firms were spun-off.

Hyundai Electronics was one of the firms bleeding cash and after its spin-off and merger with LG Semiconductor was renamed Hynix. For a number of years Hynix Semiconductor became the byword for a failed company, posting a deficit of over $5 billion in 2001 alone.

But now, the chipmaker has rejoined the ranks of healthy companies by earning over $1 billion last year... and even more impressive revenues in the first half of this year.

In contrast, Micron Technology, which once attempted a Hynix takeover, posted a deficit of $130 million in last quarter and was recently robbed of its No. 2 spot in the global DRAM market by the Korean company.

How did Hynix return from the depths of fiscal darkness?

A recent Chosun Il Bo article cites:

1. Since 2001, Hynix has sold or spun off more than 20 subsidiaries, only holding on to the DRAM sector.
( Spun-off firms include Hyundai ImageQuest, Hyundai Autonet, and Hyundai Calibration and Certification Technologies, all housed in Hyundai'?s Ichon Complex.)

2. Hynix got rid of its Youngdong headquarters building for about $100 million and sold its profitable cell phone and liquid crystal display sectors to Pantech and China'?s BOE Group.

3. The number of staff was halved from 22,000 in 2000 to 10,000 in 2005.

Finally, I see a key to Hynix's success is in its aggressive marketing and willingness to boldly compete in the global semiconductor market.