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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (53517)	1/31/2002 1:49:11 PM
From: Ohkami	Respond to of 53903

Hynix, Infineon in talks about a DRAM alliance, says report Semiconductor Business News (01/31/02 01:37 a.m. EST) SEOUL -- After breaking off merger talks with Micron Technology Inc. earlier this week, Korea's Hynix Semiconductor Inc. is now reportedly in discussions about a chip alliance with Germany's Infineon Technologies AG, according to reports from Reuters. The report claimed that Japanese business daily Nihon Keizai Shimbun quoted Infineon Chief Executive Ulrich Schumacher as saying the company was in talks with Hynix about a joint venture and other potential alliances. No other details were given in the report, but the German chip maker did say the talks included a potential DRAM alliance. It's been a roller coaster ride for Hynix, Infineon and Micron. On Monday, Micron confirmed that talks to take over seven Hynix memory fabs have broken off and no further discussions between the two firms are scheduled. Micron reportedly had offered $2.5-to-$3 billion, but some of the largest Korean creditors of Hynix wanted several billion more. Recently, Micron did buy a DRAM fab from Japan's Toshiba Corp. Micron purchased the fab after talks about a DRAM alliance between Toshiba and Infineon broke down. siliconstrategies.com

To: ild who wrote (53517)	1/31/2002 2:22:34 PM
From: Ohkami	Read Replies (1) \| Respond to of 53903

Hi ild, I know both companies quite well from personal experience. In the past, neither Infineon nor Micron have had close contacts to Hynix, as far as I can tell. This was of course a shame given that Hynix is the player that has been wreaking havoc in the industry. From this aspect, I think it can only be beneficial for industry coordination if the big players get to know each other better and establish personal communication channels at different levels. I think recent messages also point in this direction. I guess Hynix is looking for other options at this point. But I can't see how Infineon could be a partner. The probability of some sort of deal between the two seems very low to me. Schumacher has stated clearly many times that he will not put any cash on the table (not that he has a lot anyway... :-) ) and his stock is not worth as much as Appleton's either. And, Infineon already has the market share it believes it needs to be viable long-term (10%-15%) and strategically would rather want to decrease dependency on DRAM biz. Also remember that Infineon was in talks with Toshiba first, which failed for the no-cash reason and then Micron offered them a better deal. So, I think either Micron and Hynix get together somewhere or Hynix will have to go it alone. Then, they may manage in the next upturn but will surely be in BIG trouble in the next downturn.Unless the Korean government forces yet another merger, this time on Samsung. Of course, I can understand Hynix middle management's rejection of yet another merger: They just went through the forced merger with LG Semicon, which was painful enough. And I can understand creditor's rejection, too: They just lost a lot of money and already they are asked to write off even more. And I think egos, pride, national identity play a bigger role for Hynix in this than most people would think. But, alas, IMHO all of this doesn't change the conclusion that financially everyone would be better off if Micron took over Hynix's DRAM operation and Hynix creditors swap their debt to (then-Micron) equity. I'm sure the devil is in the details in the negotiations but clearly a deal would be beneficial for everyone involved, it's just a question of how the benefits are distributed. Let's trust CS Park that he manages to strike a deal somehow. He cleaned up after YH Kim once in the US, now he'll do it a second time. Any thoughts?