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Technology Stocks : Micron Only Forum

MU 237.94

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Nov 7 9:30 AM EST

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To: Skeeter Bug who wrote (42451)	1/22/1999 5:33:00 PM
From: DJBEINO	Read Replies (1) of 53903

Workers at LG cut output to protest sellout to Hyundai By Jack Robertson WASHINGTON -- DRAM production at LG Semicon Co. Ltd. was cut in half this week as workers at the company's seven Korean fabs disrupted operations to protest the pending acquisition by Hyundai Electronics Industries Co. Ltd. An LG Semicon spokesman in Seoul said fab output was running at only 50% as union employees engaged in a "work slowdown." A major loss of LG supply could be of concern to OEM buyers. Last summer, when Korea's Big Three DRAM companies cut back their production, the subsequent drop in supply was credited for helping to drive DRAM prices back up. The LG spokesman said he had no idea how long the union protest could last, but added that workers are vigorously opposing the Hyundai takeover unless they are guaranteed at least seven-year employment. A Hyundai spokesman said the company cannot responsibly make a seven-year tenure guarantee, although it vows to avoid any immediate major layoffs after the acquisition. The sudden drop in LG's DRAM production could affect global supply if it continues for any length of time, according to observers. LG has an estimated 7% share of the global DRAM market, producing 15 million 64-megabit DRAM chips per month. One industry source said last week that the quantity of LG DRAMs being traded on the spot market had already dropped markedly. Since LG sells a large percentage of its DRAMs through the spot market, the fall-off is the clearest sign yet that the labor dispute may already be eroding supplies, the source said. The protest complicates an already unruly acquisition that has been marked by the companies' inability to agree on an asking price. LG has demanded more than a 30% premium over its stock's current valuation of $1.8 billion to $2 billion, as well as a large portion of an estimated $3.1 billion in savings that the merger is supposed to achieve. semibiznews.com

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