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Hynix may sell memory unit to Micron Technology

Ailing Hynix Semiconductor Inc of South Korea's is likely to sell its entire DRAM operations to US giant Micron Technology Inc, a news report said yesterday.

"Talks are underway on two possible ways -- to sell either the entire semiconductor business or, separately, a DRAM or non-DRAM unit to Micron," an official handling Hynix restructuring told Yonhap news agency.

"But chances look higher for Hynix to do a separate sale."

Micron was likely to purchase all of Hynix's DRAM business while buying a 19-percent stake in the South Korean firm's non-DRAM unit, he added.

In either case, the world's second largest memory chipmaker Micron would take control of the world's third-biggest Hynix's DRAM operations.

The proposed alliance with Micron is considered as the most desirable option for debt-ridden Hynix, which has been kept afloat by two multi-billion dollar bailouts.

Even with the latest creditor rescue package in October, Hynix still has some six trillion won (US$4.6 billion dollars) of outstanding debts.

Yesterday, the brighter prospect for a Micron-Hynix business tie-up sent Hynix share prices up 100 won to 2,420 won.

The creditor-led restructuring committee of Hynix said earlier yesterday the South Korean firm and Micron were considering merging all their operations or an alternative proposal to join their memory chip businesses.

"Micron Technology and Hynix discussed ways of integrating either the whole semiconductor operations or their DRAM sectors," it said in a statement.

"Micron Technology is expected to submit a proposal in January 2002."

Should Micron choose to integrate only the DRAM operations, it would take a stake in Hynix's non-DRAM operations to form a strategic alliance in those businesses as well, the committee said.

The Hynix restructuring committee plans to draw up its own proposals by early next year, with Salomon Smith Barney and McKinsey acting as advisers.

The statement came after Hynix chief executive Park Chong-sup yesterday briefed the committee on his recent trip to the US for talks with Micron officials.

Park said an memorandum of understanding would be signed to forge a "very creative strategic alliance deal" which included asset sales and equity swaps as soon as early January.
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