Print

Mail

wiki links

Micron checks out Hynix plant

Micron Technology Inc, the second-largest producer of computer memory chips for personal computers, said it's proceeding with an examination of No. 3 Hynix Semiconductor Inc's plants and facilities.

Sean Mahoney, a spokesman for the Boise, Idaho-based company, made the comment in an e-mail that confirmed Micron's plans to buy a memory chip plant from Toshiba Corp. The Japanese company, the second-largest maker of semiconductors, said yesterday it would sell a US memory-chip plant to Micron for an undisclosed sum.

"The Toshiba deal fits well with our plans for continuing to reduce our cost-per-bit production expenses through efficiencies in scale," Mahoney said in the e-mail. "In the meantime, the Hynix due diligence continues."

Hynix shares fell by the 15 percent daily limit on concern that a transaction between Micron and Toshiba would erode the chances of successfully concluding its own talks with Micron that may involve a merger. Hynix dropped by the 15 percent daily limit to 2,080 won, the worst one-day loss since Sept. 17.

"The local media and investors overreacted today," said Koo Hee-jin, a semiconductor analyst at LG Investment & Securities Co in Seoul. "This is a part of efforts among chipmakers to help restore the balance between supply and demand in the market."

Makers of DRAM reported they lost money on production in their most recent earning periods. The spot price of DRAM slumped in May to lower than the price analysts estimate they cost to make after personal computer makers slashed orders for components. It was the first drop in demand for personal computers since the 1980s.

A combination of Micron and Hynix would dominate about 40 percent of the DRAM market, whose sales are forecast to drop about two thirds from last year's US$28 billion.

Hynix, which is in the middle of its second multibillion-dollar bailout this year, may need outside help if it is to avoid running out of money to pay its 8.64 trillion won (US$6.7 billion) of debts for a third time. One estimate by UBS Warburg, forecast it will need more money in the second quarter next year.

"Hynix is still talking with Micron, regardless of whatever tie-up Micron and Toshiba have formed," said Shin Kook Hwan, head of the creditor-led Hynix restructuring committee. "Hynix is doing its very best to produce a favorable outcome."

Hynix creditors, which have exchanged 3 trillion won of its debts for shares and lent 650 billion won of new funds, set up the committee to oversee the company's attempts to sell assets or attract partners to raise cash to keep it in business.
This story has been viewed 1650 times.