Hynix may seek $5-bn Micron deal to revive chip industry

Seoul, Jan 4: Creditors of Hynix Semiconductor Inc may want Micron Technology Inc to pay $5 billion for assets under a deal aimed at reviving the unprofitable memory chip industry, a Hynix official said on Friday.

The comment followed a report that the US-based Micron, the world’s second largest memory maker, plans to offer a stake in itself worth $4 billion to $5 billion in exchange for third-ranked Hynix’s core memory chip operations.

"I think creditors want that amount, which is just equivalent to their six trillion won ($4.61 billion) in exposure to us," a Hynix official, who asked not to be named.

Creditors rescued South Korea’s Hynix from collapse twice last year, including a $7 billion bailout in October that included converting debt into equity, debt rollovers and write-offs.

Micron and Hynix announced alliance talks in December that Hynix expects to complete this month, but have given few details on what they are discussing.

Hynix has said it will involve a broad alliance or one focused on dynamic random access memory (DRAM), which is used in personal computers accounting for almost two-thirds of its revenues.

The Korea Daily News, quoting an unnamed creditor bank official, said Micron plans to offer Hynix a stake worth $4 billion to $5 billion in exchange for Hynix’s DRAM operations.

Micron spokesman Sean Mahoney said the report was "premature". "Talks are continuing and no definitive agreement has been reached or proposal made," he said.

The talks come as memory prices start to recover from a crash of as much as 90 per cent in 2001, helping spur a global rally in semiconductor stocks that has driven top market indices higher.

— Reuters