Following an international roadshow designed to reassure customers and potential customers the takeover of LG Semicon brought mainly benefits, Hyundai Electronics Industries (HEI) claims to have won at least $30bn worth of orders for semiconductors and active matrix liquid crystal displays (LCDs).
The worldÆs largest memory chipmaker since the merger with LG Semicon, HEI said it had won orders worth $22bn from four major multinational companies to supply dynamic random access memory chips (DRAMs) over the coming four years. Company president Kim Young-hwan identified three of the companies as IBM, Compaq and Gateway. Saying the contracts are the largest of their kind in the world, Kim continued: When long-term contracts with other companies are taken into consideration, we are looking at confirmed orders worth $40bn over five years. The contracts were made possible by the volatile conditions in a market that is increasingly concerned about a possible shortage over the next four to five years.
He said the company also received separate orders for thin-film transistor (TFT) LCDs worth $8bn over the next five years. To cope with the demand for displays, the company will expand its production capacity by 500% to three million 14.1-inch panels by 2001, he said, with capacity hitting 1.8 million by next year.
Hyundai had been looking for either a buyer or major investor for its TFT-LCD business which has been lagging a long way behind the market-leading Samsung Electronics and LG Philips LCD. However the size of the new orders may mean a strong enough cash-flow for it to go it alone with the investment needed for new production facilities.
Looking at this yearÆs performance, Kim said the recovery in the price of 64MB DRAMs will make it possible for HEI to post substantial profits in the second half, ômore than enough to cover the loss of 125bn won ($104m) in the first half.
