SAN FRANCISCO—Memory chip maker Hynix Semiconductor Inc. reported Wednesday that its fourth quarter net income declined sharply sequentially, while fellow chip maker LSI Corp. reported a net loss.
Hynix (Seoul, South Korea) reported sales of 2.75 trillion Korean won ($2.4 billion), down 15 percent from the third quarter. The company recorded a net income for the quarter of 110 billion won ($98.7 million), down 90 percent from 1.1 billion won in the previous quarter.
Hynix siad DRAM average selling prices (ASPs) decreased 28 percent from the third quarter to the end of the fourth quarter, will bit shipments increased by 18 percent. NAND flash ASPs declined by 12 percent while bit shipment increased by 32 percent quarter-over-quarter, Hynix said.
For the year, Hynix posted salesof 12.1 trillion won ($10.8 billion), up 53 percent from 2009. The company's net income for the year was 2.66 trillion won ($2.4 billion), compared to a loss of 333 trillion won in 2009.
LSI (Milpitas, Calif) reported fourth quarter sales of $664 million, up 6 percent compared with the previous quarter and up 4 percent compared with the fourth quarter of 2009. The company posted a net loss in accordance with generally accepted accounting principles (GAAP) of $13 million, or 2 cents per share, compared with a net income of $65 million in the year-ago quarter.
On a non-GAAP basis, excluding charges, LSI reported a net income of $90 million, or 14 cents per diluted share, down from $124 million in the previous quarter.
LSI's fourth quarter numbers came in ahead of consensus analysts' expectations, which called for sales of $649 million and a non-GAAP net income of 13 cents per share, according to Yahoo Finance.
"We delivered solid quarterly revenue growth with revenues near the high end of our guidance range, reflecting seasonal strength in our storage systems and storage semiconductor businesses," said Abhi Talwalkar, LSI president and CEO, in a statement.
For the full year 2010, LSI reported sales of $2.57 billion, up 16 percent compared to 2009. The company reported a GAAP net income for the year of $40 million, or 6 cents per diluted share, after a GAAP net loss of $48 million in 2009.
Talwalkar said LSI's revenue grew substantially in 2010 thanks to increased enterprise spending for IT infrastructure products that rely on LSI's technology.
"As economic conditions continue to improve in 2011, we expect to benefit from higher enterprise spending levels and new product ramps with our tier one customers," Talwalkar said.
For the first quarter of this year, LSI expects sales to decline to between $605 million and $635 million. The guided range was consistent with consensus analysts' expectations, according to Yahoo Finance.
In a report, Hans Mosesmann, an analyst with Raymond James & Associates Inc., said: ''LSI saw a recovery in 4Q10 off weaker 2Q10 and 3Q10 quarters, which were impacted by customers’ inventory accumulations that are now mostly over. Inventories on LSI’s balance sheet were down 15 percent q/q in 4Q10 and inventory days moved down to 49 from 62.
Storage systems grew 14 percent q/q in 4Q10 driven by mid-range platform growth at IBM, Oracle and Dell, and entry level growth with the new 2600 platform which included 6 new customers (16 total). LSI started to see the ramp of Seagate’s Savvio and Constellation enterprise HDDs in 4Q10 – a dynamic that we believe will lead to further penetration at Seagate over the next couple of years into hybrid HDDs and client HDD in general.
LSI guided 1Q11 sales to $605-635 million (down 6.7 percent at the midpoint), or in line with normal seasonality of down mid- to highsingle-digit-percentage sequential growth. This compares to our prior $615.0 million estimate (down 5.4 percent q/q from the prior 4Q10 estimate) and consensus of $615.9 million (down 5.2 percent q/q). The networking semiconductor and storage systems businesses are expected to be down sequentially, while the Storage Semiconductors business is expected to be roughly flat.''
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