South Korea's semiconductor giant Samsung Electronics Co (SEC) said yesterday it was considering an offer to buy the memory chip operations of Japan's Toshiba Corp.
But analysts were skeptical of SEC's ability to make such a major expansion during a global microchip slump which has left another South Korean semiconductor giant, Hynix Semiconductor Inc, teetering on the verge of collapse.
"It is true that we have received an offer from Toshiba to buy its memory chip lines," an SEC spokesman said.
"It is too soon to give our opinion of the offer as we need more time to look at it. But the problem is that Toshiba's production lines are based on technology which is different from ours," he said.
He said any consolidation of the world DRAM business would be desirable because of the global slump in sales of computers and mobile phones which has badly hit all semiconductor makers.
SEC admitted it had received the approach after the Korea Stock Exchange called on the company to clarify a Wall Street Journal report that it was talking with Toshiba over a possible memory chip merger.
Toshiba and Infineon, part of Siemens AG, are in discussions to combine their memory chip businesses into a joint venture and Toshiba is in talks with Samsung over a similar deal, the report said.
One long term possibility would be for Samsung to join or absorb a Toshiba-Infineon joint venture some time in the future, the Wall Street Journal said.
SEC produced US$8.8 billion worth of memory chips last year, accounting for 16.1 percent of the global market. Toshiba ranked fourth with US$3.5 billion and a 6.4 percent market share.
Analysts said, however, SEC would likely see little merit in the offer.
"SEC, whose DRAM production facilities are the world's most efficient, is unlikely to find any reason to add to its DRAM facilities," Lee Sang-mun of Daewoo Securities Co said.
"It would be especially awkward for SEC to acquire more facilities at a time when Hynix is in a crisis," he said.
Hynix' main creditor, Korea Exchange Bank (KEB), on Tuesday tabled a new rescue package focusing on a debt for equity swap worth three trillion won (US$2.34 billion) to save Hynix from sinking under mounting debts.
But the proposal faces strong opposition from investment trust companies, which are still reeling under the impact of the collapse of the giant Daewoo Group.
The investment trusts will be asked to roll over 1.2 trillion won of unsecured three-year bonds, which start maturing in August, for another three years, and to halve the bonds' yield.
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