South Korea’s money-losing Hynix Semiconductor Inc. is making progress toward raising new capital from creditors and direct backing from the government is not being considered, officials said Monday.
Hynix, the world’s second-largest manufacturer of computer memory chips after Samsung Electronics Co., has racked up four straight quarters of net losses amid a long slump in the semiconductor industry.
The Icheon, South Korea-based company is talking with creditors, which own 36 percent of its shares, said Hynix executive James Kim. Solutions available include obtaining asset-secured loans, issuing new shares and selling idle assets.
“We are discussing possible options very positively at this time,” said Kim, who heads investor relations at Hynix. “But action won’t be happening now.”
Kim said that nothing has been decided and it would take Hynix a month or two “to select the best option for us.”
The company, which is looking to raise up to 1 trillion won ($690.6 million), is in no immediate danger, but its cash position could come under pressure if industry conditions do not improve, Kim said.
Kim Eun-young, a spokeswoman for Korea Exchange Bank, Hynix’s largest creditor, said nothing had been decided.
Hynix announced Sunday that it will carry out a massive cost-cutting effort to free up cash that can be used to help it recover from what it termed a “management crisis in line with the long downturn in the memory chip market and global economic slowdown.”
The company said it will slash top officials’ pay, cut the number of executives, encourage workers to quit voluntarily and make all employees take two weeks of unpaid leave between January and April next year.
Hynix competes with Samsung Electronics in NAND flash and DRAM, or dynamic random access memory, chips. NAND chips are used in digital devices such as music players and cameras, while DRAMs are used mostly in personal computers.
Semiconductor manufacturers…