Hynix in talks with Infineon for alliance

Feb. 4, 2002 – Seoul, Korea – Hynix Semiconductor Inc. is now in talks with Germany’s Infineon Technologies AG.

Infineon CEO Ulrich Schumacher said that Hynix and Infineon were considering a tie-up in connection with joint DRAM chip productions, reported the Financial Times. Analysts in Seoul said the talks with Micron are increasingly likely to fail as Hynix seeks other options.

The news about Infineon came when Hynix creditors failed to iron out their differences over the pricing of Hynix’s assets in the talks with Micron.

Micron and Hynix have been negotiating since December for an alliance that could create the world’s largest memory chipmaker, outpacing Samsung Electronics, but the two sides have yet to produce a tangible agreement.

“It seems like the talks between Hynix and Micron are now almost dead,” said SK Securities Semiconductor Analyst Jeon Woo-jong. Jeon said Hynix management, employees, and retail investors increasingly want the company to stand on its own if the sell-off price goes below $4 billion.

“Hynix has about 6.5 trillion won in debt, and if the asset sale brings in less than 4 billion, many people here think it’s not a good deal at all, particularly at a time when the DRAM chip demand from the PC sector is strengthening,” Jeon said.

He said Hynix is also open to talks with other chipmakers, including Infineon, as the company is seeking the best available deal. Micron and Infineon are now expected to pay largely through stakes or new share offerings, if the alliance deal ever comes through, while Hynix is yearning for a cash investment.

But the new development that Hynix’s management, employees, and retail investors want is the additional cash injection of 1 trillion won from Korean creditors, needed to upgrade its chip production line this year to stay competitive in the global market, Jeon said.


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