'India is a promising destination for Hynix to grow in terms of volume and revenues'

Singapore-based KC Suh, who looks after Hynix’s APac business, finds India
to be one of the most promising markets for memory products. He is confident of
maintaining 40-45% marketshare in the country. His recent visit to India was an
effort to educate channel partners and customers about Hynix counterfeits. Suh
plans to conduct roadshows in 18 B- and C-class towns to further spread the
awareness about genuine products. Excerpts from the interview:

What kind of opportunities do you foresee for Hynix in India?

Since the time Hynix made its official entry in India in June 1998 (under
the name Hyundai Electronics Industries), it has been able to establish a strong
presence with an estimated marketshare of 40-45%. In APac, India is the second
largest and one of the fastest growing market with a strong demand for IT.

The current tax rebates given by the Indian Government to certain IT products
is sure to further help the industry grow faster. Given these facts, India
becomes one of the most promising destinations for Hynix to grow, both in terms
of volume and revenues.

What is Hynix’s worldwide marketshare? And where does
India stand in Hynix’s APac business?

Hynix is the third largest DRAM manufacturer worldwide with 16% marketshare.
Hynix Singapore covers SAARC region, Thailand, Indonesia and Malaysia among
others.

Out of the total Singapore business, the Indian subcontinent
contributes nearly 25%. In India, we have an estimated market-

share of about 40-45% in the organized space and are confident of maintaining
the same. Hynix sold 11 million 256-Mbit equivalent memory in India in 2003.

What puts Hynix ahead of competition in India?

DRAM as a product needs continuous innovations and upgradation. Hynix is the
technology driver in this space. This, along with competitive pricing, has
placed us in a strong position in the memory business.

Samsung and Micron are the two other major competing brands
for Hynix in India. There are many other smaller brands such as TA, Spectek and
Elixir trailing behind Hynix.

Does Hynix make memory modules or just memory chipsets? Do
you have any manufacturing plans for India?

We manufacture both memory modules as well as chipsets. We offer a complete
range of memory modules for desktops, servers and mobile computers. Currently
there are no plans for manufacturing in this country. But Hynix is flexible. Any
manufacturing plans would depend on business volumes.

However, with new political developments taking place, India
can become a hub to export memory modules to other SAARC countries, Middle East
and North African markets.

What kind of channel partnerships do you have in India?

We sell our products through two channels. One is the national distribution
mode, where we have eSys Distribution Pte, Singapore as our partner. They have
17 branch offices in India to cater to the channel market here.

Apart from this, we have OEM channels which are module houses
making memory modules using Hynix chipset. Bangalore-based Sun Electronic
Technologies is a Hynix-Approved Module House. Other Hynix module makers are
Abacus Peripherals and D-Link India.

What is your business model in the country?

With changing market conditions and tax structures, Hynix has kept various
options open to the Indian market. Buyers have the choice of either directly
importing memory modules or importing just the chipset and get the modules
manufactured in India. They also have the option of buying modules manufactured
in India from the module house.

How do you handle warranty and service support for the
product?

Warranty support for its direct customers is handled by Hynix. Indirect
customers are taken care of by the distributor and module houses.

What is the next memory technology and new products that
Hynix is working on?

We are working on 90nm technology that would be implemented in 2004. DDR
500, DDR II, graphic memory and Nand Flash are some of the new products Hynix
will be introducing soon.

Lot of memory modules with Hynix chipset comes to India
through gray channels. Are these modules counterfeits?

According to market reports, gray market products many not be counterfeits,
but they are most likely to be inferior. Though there are no serious complaints
in gray market products, module failure rate is likely to be higher, because of
low grade PCB and components and insufficient QA checks.

Counterfeits are not as serious an issue in India as it is in
other South-East Asian countries. China being a much bigger market, is the worst
affected by counterfeits. However, Hynix is very serious about tackling this
problem here and takes legal actions against offenders from time to time.

In an attempt to educate customers and channel partners about
counterfeits, we are also planning to conduct roadshows in over 18 B and C-class
cities.

NELSON JOHNY