Infineon, Hynix in talks

January 31, 2002 Posted: 1217 GMT

LONDON (CNN) -- German chipmaker Infineon's shares soared on Thursday after it said it was in discussions with South Korea's Hynix about possible alliances.

However, neither company would confirm a Japanese newspaper report that the negotiations were aimed at a corporate tie-up or joint venture.

"We are talking with Hynix...but those talks are not necessarily aimed at a tie-up," a spokesman for Infineon Technologies Japan told Reuters. "These are talks among business people, so it goes without saying, of course, that (a tie-up) is also possible."

The talks are not necessarily limited to dynamic random access memory (DRAM) chips, key products used for computer memory, the spokesman said.

A spokesman for Hynix also would not confirm whether the company, the world's third-largest DRAM chip maker, and Infineon, the fourth-largest, was in tie-up talks.

Japan's Nihon Keizai Shimbun business daily quoted Infineon Chief Executive Ulrich Schumacher on Thursday as saying his company was talking with Hynix on several potential models for cooperation, including a joint venture.

In December, Hynix and its creditors began discussions about the sale of DRAM chip-production operations to U.S.-based Micron Technology Inc, the world's second-largest DRAM maker.

However, those talks have apparently stalled over pricing issues.

"The talks haven't collapsed yet," said Shin Kook-hwan, South Korea's new commerce minister who previously held a top position at Hynix. "We are still negotiating and I expect some form of cooperation with Micron."

Talks of consolidation have been rampant in the sector, as the economic slowdown drastically cut into memory chip prices. As part of the global consolidation, Micron recently purchased a U.S. chip plant from Japan's Toshiba Corp.

Infineon has also been in talks with Toshiba about a tie-up, and is also looking at possible alliances with three Taiwanese chipmakers.

Infineon's shares were up 4.4 percent at 24.84 in midday trading on Thursday in Frankfurt.