Micron, Hynix deal near

December 26, 2001 Posted: 1647 GMT

SEOUL, South Korea (Reuters) -- Shares of South Korea's Hynix Semiconductor Inc. jumped 6 percent early Wednesday after the chipmaker said it expects to form a strategic alliance with Micron Technology through a memorandum of understanding in January.

Micron (MU: up $1.23 to $30.95, Research, Estimates) and Hynix, the second- and third-ranked DRAM chipmakers, are in talks on a way to tide them over overcapacity problems that have sent chip prices below the cost of making them.

"We aim to sign [a memorandum of understanding] with Micron in January," a Hynix spokesman said after CEO Park Chong-sup spoke to reporters Tuesday after returning from talks in the United States with Micron.

"In recent talks, we structured specific ways we might form alliances and agreed both sides need to closely cooperate further," the daily Chosun Ilbo quoted Park as saying.

Park expects the alliance to be comprehensive, the paper said. Hynix and Micron have been tight-lipped on how they might tie up, but Micron President Steve Appleton told analysts last week that taking a minority stake in Hynix is not a likely option.

"I don't think a minority position in Hynix would be an advantage to us," Appleton said on a conference call.

Talks between the two reflect consolidation reshaping the sector.

Japan's Toshiba Corp. said last week it will sell a U.S. chip plant to Micron after talks with German rival Infineon Technologies (IFX: up $0.55 to $20.07, Research, Estimates) fell apart.

Officials of Hynix, formerly Hyundai Electronics, played down market speculation it might be in separate talks with Infineon.

"We are not in talks with Infineon," spokeswoman Kang In-young said.