Intel, Korean Giant Samsung Discuss Closer Ties On Chip Production
SEOUL -(Dow Jones)- South Korea's Samsung Electronics Co., the
world's largest maker of memory chips, Friday said it is in talks with
Intel Corp., the biggest maker of microprocessor chips, on closer
cooperation.
Intel (INTC) is considering investing in Samsung's semiconductor
operations in exchange for more stable supplies of dynamic random access
memory, or DRAM, chips from the Korean company.
Samsung Electronics, a major unit of the Samsung Group conglomerate,
denied the possibility that Intel may raise its stake in the company.
Intel currently holds a 10% stake in Samsung Electronics' U.S.
subsidiary, Samsung Austin Semiconductor.
The two companies announced their initial partnership last May in an
effort to draw on Intel's strength in computer technology and Samsung's
strength in consumer electronics to create new kinds of devices for
consumers.
The talks come at a time when a number of U.S. companies are
examining whether to buy assets of cash-strapped Korean companies.
Adaptec Inc. Thursday said it agreed to acquire a U.S. electronics unit
of Korean conglomerate Hyundai for $775 million.
South Korean chip makers - all owned by the country's debt-ridden
conglomerates - for years borrowed and expanded at astounding speed as
U.S., Japanese and other foreign companies were successfully kept out.
South Korea flooded the world with cheap chips, leading its
export-driven economy. Experts say Korea's leading industries will go
through a drastic change; they will slow down radically for the first
time.
As part of a record $55 billion rescue plan, the International
Monetary Fund has required South Korea to slow economic growth, raise
interest rates, tighten credit control and accept more foreign imports.
That has led to gloomy forecasts for the semiconductor industry, the
pride of the nation's export machine. South Korea supplies 40% of the
world's memory chips. A supply glut last year sent global computer chip
prices plunging by 80%.
Intel's talks with Samsung come as Micron Technology Inc., one of the
last U.S. manufacturers of memory chips, is lobbying U.S. government
officials and members of Congress against the IMF bailout of Korea. The
Boise, Idaho, comapny has said the taxpayer dollars could help Korean
chip makers continue their unfair competition.
Copyright (c) 1998 Dow Jones & Company, Inc. |
