Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (78155)	8/29/2001 7:13:04 PM
From: Don Green	Respond to of 93625

Toshiba looks to lighten memory's burden By Paul Kallender, EE Times Aug 29, 2001 (4:10 PM) URL: eetimes.com TOKYO — The terrible memory market is a backdrop for potential turning points at two major memory makers: Toshiba Corp. is in discussions to sell its DRAM business and possibly its flash memory business to Samsung Electronics Co. Ltd., and Hynix Semiconductor is awaiting a decision Thursday (Aug. 30) that will affect its ability to pay its 7.1 trillion won ($5.54 billion) in long-term debt. The two companies are at counterpoint, as Hynix attempts to hold onto a memory business and Toshiba attempts to shed all or part of it. Samsung and Infineon Technologies AG each confirmed that it was approached by Toshiba about a possible sale or partnership involving memory. Toshiba is exploring the move as part of a major restructuring announced Monday (Aug. 27), when it said it would cut at least 17,000 jobs. Toshiba president Tadashi Okamura refused to discuss the company's sale or collaboration strategy for DRAM on Monday, but EE Times has learned that Toshiba has put its "entire memory business" on the table for discussions of a sale or partnership, according to a Korean industry source. The inclusion of Toshiba's flagship flash memory business in the talks could increase interest from Samsung, which is lukewarm about buying Toshiba's DRAM lines, the source said. "Toshiba is giving Samsung an incentive to buy its memory business," the source said. "Samsung has more interest in Toshiba's flash technology." A Samsung spokeswoman said she could "confirm that we received a proposal from Toshiba this week and we are following through on the offer, but we can give no comment on the details of the offer." A Toshiba spokesman also declined comment, and referred to the company's official announcement made Monday. According to Toshiba's "action plan," the company's DRAM business is slated for "business unification with a new partner." Its flash, polysilicon LCD and discrete businesses are considered "innovator-type businesses," which implies that Toshiba will not spin them off, the spokesman suggested. Toshiba sees great potential for flash memory, said senior executive vice president Yasuo Morimoto. "As the cost of NAND flash memory has dropped to about 40 yen [about 33 cents] per Mbyte, it is now approaching the level in which it could replace hard-disk drives," he said. Toshiba expects 40 percent growth for the flash memory market between 2002 and 2003, therefore "it is the most suitable strategy for Toshiba to take the lead of such a rapid growing market by taking advantage of our flash technology," Morimoto said. Even so, Okamura suggested that Toshiba has not completely ruled out selling more than its DRAM lines. The sale of Toshiba's flash business to Samsung would give the Korean company access to Toshiba's advanced NAND and NOR technologies, said Soo Kyoum Kim, senior manager for worldwide memory and semiconductors at International Data Corp in Seoul, South Korea. "Samsung only has NAND and they want to expand into NOR," he said. "If Samsung could take over the flash business it would be very good for them. Toshiba has key flash businesses, including Sony's Memory Stick and the SD card business." Weighing the advantages of the possible alliances, Kim said that Infineon would benefit more than Samsung from a DRAM-only deal. Toshiba's 6 percent DRAM market share would give Infineon a a key Asian manufacturing presence and a big boost to fight Samsung, he said. Debt relief Hynix's latest escape from insolvency could be revealed Thursday as it tries to raise about $3.51 billion through a combination debt-for-equity swop and rights issues. If successful, the swop will give the company breathing space to pay off 20 percent of its long-term debt over the fourth quarter, said Simon Woo, an equity analyst for Hyundai Securities Ltd. (Seoul, South Korea). The swop will reduce Hynix's debt payments. The wrangling over debt comes on top of eight horrible months when Hynix saw DRAM prices drop 90 percent. In January, the Korean government told Korea Development Bank (KDB) to buy 80 percent of Hynix's bonds. In May, a consortium of domestic banks extended a $4.4 billion line of credit, and in June Salomon Smith Barney engineering global depository receipts. The GDRs gave the company enough cash to remain solvent until the end of 2002, said Farhad Tabrizi, vice president of worldwide marketing for memory products at Hynix. Analyst Woo said Thursday's negotiations between Hynix, KDB, creditors and shareholders could yield several outcomes. Under the most optimistic scenario, Hynix will get both the swop and the separate rights issue, he said. "We believe Hynix will get its swop with the support of the KDB, unless the Korean government changes its policy," Woo said. "Otherwise they should just give up."