Korean chipmaker LG Semicon Co has reported a return to profitability that appears to have come with the overall improvements in the world semiconductor market. LG posted net income of 251.8bn won ($201m), compared to a 1997 loss of $290bn won ($232m). Overall sales were up roughly 40% at the equivalent of $2.23bn from $2.01bn last year.
LG is hoping that its reversal of fortune might prove a valuable bargaining chip in its deadlocked merger negotiations with fellow electronics and industrial giant Hyundai (see separate story), or even cause the Korean government to call off the merger, which it ordered. LG has been pressing for a higher acquisition price and greater job security for its workers after the acquisition. March 31 is the latest deadline for resolving the terms of the transaction.
But there could be more to the story than that, however, as the Korean Maeil Business Newspaper reported that outside audit results showed that LG Semicon made only a 46.1bn won profit for the year ($36.7m), despite the much higher figure it has reported. Despite the discrepancy, which could be seen as an attempt to manipulate the Hyundai deal, local accounting firms have approved the company’s financial statements.
