"Competitors were thinking that Hynix was at its final stage of survival and so they were artificially flooding the market to make Hynix go away," said Farhad Tabrizi, vice president of worldwide memory marketing in the United States. "That was their wishful thinking."

To show its resolve, Hynix said it has moved its entire sales and marketing operations to San Jose, Calif. from Seoul, South Korea. Hynix is also bringing back to the United States senior vice president D.S. Kim to head operations. Kim had earlier led the company's U.S. operations for 10 years.

Tabrizi, who will report to Kim, said the move could be the first step to a larger U.S. presence. "Eventually Hynix would like to completely move its headquarters to the U.S. and maybe be listed in the U.S. financial stock exchange," he said. "I believe this is an intermediate step towards that. Sales and marketing makes the most sense to do earliest."

Hynix's effort to forge closer ties to its largest customers — including Compaq, Hewlett-Packard and IBM — comes as its creditors agreed to a massive bailout package to keep the company afloat. The rescue fund includes $500 million in new loans, $3 billion in debt-to-equity conversion and the rollover of $5.5 billion in other loans. The package will reduce the company's debt-to-equity ratio from 381 percent to 111 percent, and will ensure the company has no cash-flow problems "even if global semiconductor prices remain unchanged next year," Tabrizi said.

But though Hynix has found financial shelter, the bailout has unleashed a political storm. Semiconductor industry executives in Japan recently said they may push Japan's government to pass anti-dumping legislation, a move some said is aimed at Hynix. Micron Technology Inc., meanwhile, has renewed its effort to get the U.S. Trade Representative to file a claim with the World Trade Organization against South Korea just after the latest bailout package was approved.

But Hynix contends that it has acted responsibly to get through the worst semiconductor downturn in the industry's history. By early next year, Hynix will have reduced its monthly wafer output from the 240,000 it was producing in 2000 to 180,000. It is also diversifying its product portfolio by producing more flash, SRAM and devices from outside companies. "By 2005, if it's 50 percent DRAM and 50 percent other products we will have achieved our goal," Tabrizi said.

Moreover, Hynix has not gained marketshare while Samsung Electronics Co. Ltd. and Micron Technology continue to get a larger share of the DRAM pie by increasing their output, Tabrizi said. "The key is output and marketshare. We have not gained," he said.

But Hynix is determined to remain a top player, and refuses to back down even as the price as some 128-Mbit DRAMs drop as low as 92 cents apiece. "If we have a product, we will meet the competitive market pricing," Tabrizi said.