Hynix stocks jump on Micron news

Dec. 26, 2001 — Seoul, Korea — Hynix Semiconductor Inc. shares jumped today following the troubled memory chipmaker’s announcement that it expected to sign an alliance with US rival Micron Technology Inc. next month.

The deal, which could help Hynix survive a record slump in chip prices, might involve Micron taking over management control at Hynix or simply shopping for assets such as its chip plant in Eugene, Oregon, reported Reuters.

Hynix jumped 15 percent to a one-week high of 2,320 won after CEO Park Chong-sup told local media he expected the two sides to sign an MOU in January.

Micron and Hynix rank second and third in the memory sector respectively and combined would dwarf leader Samsung Electronics in production capacity.

The problem is capacity has become a burden as oversupply and falling demand from personal computer makers have sent chip prices below production costs.

Trade in Hynix accounted for 41 percent of total volume on the Korean stock exchange, where the benchmark index rose 1.14 percent.

Growing hopes for a deal that would reduce the global capacity glut also lifted chipmakers in Taiwan, where Mosel Vitelic Inc , Winbond Electronics and Nanya Technologies rose by the seven percent daily limit.

Hynix and Micron have been tight-lipped about what sort of tie-up they might agree in talks announced at the start of the month.

Hynix, which owes 8.64 trillion won to financial institutions, needs to sell assets to raise funds.

Creditors have bailed the company out twice this year and Hynix is now under pressure to sell assets to show it is doing its share to survive.

“In recent talks (with Micron), we structured specific ways we might form alliances and agreed both sides need to closely cooperate further,” Hynix’s Park told reporters on Tuesday after returning from talks in the United States with Micron.

Speculation that the alliance could lead to a comprehensive tie-up or a simple asset sale was spurred last week by comments from Micron President Steve Appleton.

“I don’t think a minority position in Hynix would be an advantage to us,” Appleton said in a conference call with analysts.


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