Hynix, Micron begin alliance talks

SEOUL, South Korea -- A delegation from U.S. chipmaker Micron Technology arrived in Seoul and began tie-up talks with Hynix Semiconductor, the Korean chipmaker said Wednesday.

Micron and Hynix, the world's second- and third-ranked memory chipmakers behind Korea's Samsung Electronics, said on Monday they planned to discuss a strategic alliance or other transaction, including a merger.

"Around 10 people including working-level officials from Micron have arrived in Seoul and begun negotiations for a tie-up," a Hynix official told Reuters.

Shares in Hynix, former known as Hyundai Electronics, were up 70 won or 2.6 percent at 2730 won by noon Wednesday.

Hynix shares have risen sharply this week since the two companies announced they would meet, and have more than doubled since late October on speculation of a tie-up with Micron or another maker.

Speculation over creditors' plans

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Korean media reports have speculated major creditors of heavily indebted Hynix may sell part of their 70 percent stake to Micron.

"Both companies are evaluating a broad array of strategic options," Hynix chief executive Park Chong-sup and Steve Appleton, chief executive of Micron, said in a statement issued in Seoul Monday.

A merger would create the world's largest memory chipmaker, topping Samsung Electronics.

"This effort represents a part of Hynix's ongoing evaluation of possible steps to maximize shareholder value in the face of an unprecedented downturn in the semiconductor industry," Park said in the statement.

Hynix and other makers of computer memory chips have seen prices for DRAM (dynamic random access memory) chips fall by up to 90 percent this year, though they have recently risen slightly.

In October Hynix reported a third-quarter loss of $1.25 billion -- its worst on record -- and said it would require workers to take four weeks' unpaid leave before March. it also closed a plant in Oregon for six months this northern summer.

Weighed down by its debt load of about $6.6 billion, Hynix has cut 8,000 jobs, bringing its worldwide workforce down to 14,000.

Reuters contributed to this report.