Hynix Semiconductor Inc, the world's second-largest maker of computer memory chips, agreed to buy a NT$5.09 billion (US$168 million) stake in ProMOS Technologies Inc (茂德科技), bolstering a partnership to help boost capacity.
The South Korean chipmaker plans to buy 640 million shares of the Taiwanese company at NT$7.96 each, said Park Seong-ae, a spokeswoman for Ichon, South Korea-based Hynix.
That’s 13 percent higher than ProMOS’ closing price in Taipei on Monday.
The two Asian chipmakers, which posted losses last quarter because of a glut, said last month they were in talks over a possible stake purchase.
The deal helps Hynix secure capacity without building new multibillion-dollar factories, while extending an accord that allows ProMOS to make dynamic random access memory (DRAM) using Hynix’s technology.
“From Hynix’s standpoint, they’re basically buying capacity,” Gokul Hariharan, of JPMorgan Chase & Co, said in Taipei yesterday. “It’s good that they’ve been able to secure this deal finally.”
Hariharan has a “neutral” rating on ProMOS.
ProMOS also plans to sell 800 million shares in the form of global depositary receipts “in the not too distant future” and issue US$350 million in convertible bonds, Ben Tseng (曾邦助), the Taiwanese chipmaker’s spokesman, said by telephone yesterday.
A glut of computer memory chips last year drove down prices, leading all major producers, including industry leader Samsung Electronics Co, to post losses from DRAM chips during the first quarter of the year.
Buying the newly issued shares would make Hynix the second-largest shareholder of ProMOS behind Taiwanese chipmaker Mosel Vitelic Inc (茂矽), Tseng said.
Hynix said on May 8 it expected to secure extra capacity of about 60,000 to 70,000 wafers a month from the agreement, equivalent to building a factory worth about 3 trillion won (US$2.9 billion). Hynix may invite other investors to participate in the stake purchase, Park said yesterday.
Hynix reported a second straight quarterly loss in April.
ProMOS posted a record loss of NT$8.05 billion for the quarter ended March 31, its fourth straight deficit.
ProMOS, which makes DRAM chips using Hynix’s 70-nanometer technology, will be allowed to use the South Korean company’s more advanced 50-nanometer process, the two chipmakers said last month.
ProMOS shares climbed 3 percent, the most in almost two weeks, to close at NT$7.28 in Taipei. Hynix fell 1.7 percent to a three-week low of 28,900 won in Seoul.
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