The company said it recorded a 249.1 billion won ($186.5 million) net loss for the January-June period, from a 16 billion won profit in the same period last year.

``We posted a considerable amount of operating profit which reflects the sales performance, but huge expenses incurred by the won's depreciation and interest payments wiped out the profit,'' spokesman Lee Baek-soo said.

He said LG Semicon's operating profit was 134.9 billion won against a 167 billion won gain in the first half of 1997. But non-operating expenses soared to 562.1 billion won from 188.9 billion won.

Non-operating expenses jumped because the company deferred some of last year's foreign exchange translation losses and because of higher interest payments when rates spiralled up at the beginning of the year.

The netshould improve for the full year because international unit prices of dynamic random access memory (DRAM) chips were recovering and interest rates easing, the company said.

``The price of 64-megabit DRAM's now stands at $9.6 per unit after falling to as low as $7 in May-June and our production cost continues to drop,'' said Lee.

But the improving performance for the rest of this year would be insufficient to offset the loss recorded in the first six-month period.

``Our full-year earnings figures will improve significantly but we will not likely be able to avoid recording a loss,'' Lee said. He refused to give a full-year earnings forecast.

Barra's The Estimate Directory consensus put LG Semicon's full-year net forecast at a 83.2 billion loss, compared with a 289.72 billion loss in 1997.

The news had little impact on LG Semicon's stock price, which closed the morning session 300 won higher at 9,810 per share.

By contrast, LG Semicon's sister firm LG Electronics Inc and rival chipmaker SamsungElectronics Co showed a profitable first half.

Consumer electronics maker LG Electronics on Friday posted a 101.3 billion won net profit for the January-June period, slightly down from a year ago's 109.6 billion won profit.

LG Electronics said its net profit was aided by strong export sales, which increased by 60.8 per cent in terms of the won to four trillion won during the six months.

Both LG Semicon and LG Electronics are units of the LG Group, one of South Korea's top five conglomerates, or chaebols as they are widely called.

Samsung Electronics, the world's largest DRAM supplier, on Thursday posted a sharp growth in half-year profit, largely due to brisk exports that outpaced a drop in domestic sales.

Samsung, which unlike LG Semicon also makes a diverse range of electronic goods, said its net profit rose to 150.1 billion won from a 123.2 billion won profit a year ago.

It said half-year exports, in terms of the won, spurted by 47 per cent to 7.36 trillion won from five trillion won in thesame period of last year.

The won's sharp depreciation against the dollar since the middle of last year has awarded a better price competitiveness for South Korean exports.

But the cheaper won has at the same time ballooned financial costs relating to foreign currency-denominated debt, mostly offsetting any extra gains from export sales.