Rumors Swirl Around Hynix-Micron
Could recovery indications drive up asking price?
By Tom Murphy -- Electronic News, 1/14/2002
e-insite.net
Round and round the DRAM rumor mill goes, and where it stops, only Hynix creditors know.
As reports filter out of Korea about negotiations between Hynix and Micron, most industry watchers want to know what price the companies will settle on for a deal. The ailing memory chipmaker, based in Ichon, South Korea, has been in talks with Boise, Idaho-based Micron since December.
The latest reports put Micron's offer at $5 billion for all seven of Hynix's memory fabs, including the Korean company's SRAM and flash memory lines. But Hynix is on the hook to its creditors for at least $6 billion after a government-backed bailout late last summer. Each of Hynix's fabs is estimated to be worth $1.3 billion to $1.6 billion.
The $5 billion offer seems quite a bit better than Micron's reported opening offer of $2 billion. But a recent rise in spot DRAM prices may give Hynix a bit more time to mull over any bid from Micron.
"Even if there is a recovery in the DRAM market this year, I don't think Hynix will become profitable without outside help," said Sherry Garber, analyst for Semico Research in Scottsdale, Ariz. "At the same time, though, I don't see where a deal makes sense for Micron." |
