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Hynix to buy 2% stake in Phison for NT$346.5 million

Hynix Semiconductor Inc, the world’s third-largest maker of memory chips used in electronics, plans to buy a 2 percent stake in Taiwan’s Phison Electronics Co (群聯電子) for NT$346.5 million (US$11 million) and jointly develop storage device chips.

Hynix will buy 2.1 million shares through a private placement at NT$165 each, a 30 percent discount to the stock’s five-day average prior to yesterday’s close, Hsinchu-based Phison said in a statement on Monday. Hynix plans to sign a final agreement within the first half of the year, the South Korea-based company said in a separate statement yesterday.

Phison, which designs controller chips used in storage devices such as hard drives and memory cards, is expanding its range of products to semiconductors used in phones and navigation devices. The Hynix deal will secure the company’s supply of so-called NAND flash chips, used to save data in electronics devices, Phison spokesman Antonio Yu (于志強) said by telephone yesterday.

“We view such an alliance as very positive for Phison,” Robert Chen and Joey Cheng, Taipei-based analysts at Goldman Sachs Group Inc, wrote in a report.

They raised their share price estimate 40 percent to NT$280 and maintained a “neutral” rating saying Hynix’s move “indicates Phison’s competitive business model and superior industry position.”

Hynix will be the second-largest shareholder in Phison behind Toshiba Corp, Yu said. Toshiba holds 17 percent of Phison’s shares, while Kingston Technology Co, with 1.1 percent, is the third largest shareholder, Yu said.
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