Hynix open to all offers


Hynix is in talks with everyone in the industry, but favors Micron's overtures

By Alex Frew McMillan
CNN Hong Kong

SEOUL, South Korea -- The soap opera saga of the world's memory-chip makers has taken another turn.

Seoul-based Hynix Semiconductor's shares ended well up, after an admission that Infineon is in talks with the world's No. 3 memory-chip maker.

Infineon CEO Ulrich Schumacher is now in Seoul. But a spokeswoman for the German company told Reuters news agency there is no definite deal to report.

Meantime, the Financial Times newspaper reports that Samsung Electronics Co. is in discussions with Hynix.

"Samsung and Hynix are from the same country, so there are a lot of discussions, but there have been no official talks," a Hynix official told the FT.

Samsung had not previously been discussing a deal with Hynix, and its shares have raced up as its rival ran into trouble.

A Korean soap opera

But the latest revelations mean that, a little like one of the Korean soap operas that are so popular in Asia, all the biggest companies in the industry have now been in talks to do a deal with Hynix.

Analysts say there is too much capacity and consolidation is inevitable.

A Hynix official said the company is interested in talking to anyone who is interested in investing in it.

Hynix Semiconductor stock closed up 7.2 percent on Friday, to 2,615 won. That's at a time the main Korean index, the Kospi, dropped 0.76 percent.

Stock in Samsung Electronics also rose, up 2.83 percent to 309,000 won.

On Friday, Hynix's lead bank said the company is leaning toward Micron. But investors are wary that the new wrinkles may hold up that deal.

"At this point, we are giving priority to the Micron talks as we have been involved over a deal with the U.S. company," Hynix main creditor, Korea Exchange Bank, wrote in a statement.

Micron CEO Steve Appleton will address analysts later Friday.

Deadline missed

Infineon is the industry No. 4, with Korean company Samsung at No. 1 and Micron Technology of the United States at No. 2.

The price of the chips they make, called DRAM or dynamic random access memory chips, plummeted more than 90 percent last year, in what the companies say was their worst year ever.

Though the price has picked up this year, the effects are still being felt.

Japanese chipmakers like Toshiba have also gotten in on the act. Toshiba disrupted the way the industry was shaping up, selling its Virginia plant last year to Micron.

The Japanese companies had been considering a suit against their Korean competitors, which they alleged had been dumping chips, selling them below cost overseas to undermine rivals.

That sent Hynix stock reeling, because Micron had been expected to merge with it. But talks between the two have continued.

Hynix CEO Park Chong-sup had expected a deal in January, but was forced to admit that deadline wouldn't be met. Micron has always been more circumspect.