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To: Kerry Phineas who wrote (31040)	3/22/1998 10:35:00 PM
From: DJBEINO	Respond to of 53903

03-23-98 HEI to Downsize Far-Flung Operations Yu Kun-ha Staff reporter Hyundai Electronics Industries (HEI), under the pressure of a deep financial crunch, will soon take unprecedented steps to restructure its far-flung operations. The cash-strapped chipmaking giant is prepared to let go of some of its money-losing subsidiaries to concentrate its resources on such core businesses as semiconductors, mobile phones and liquid crystal displays. According to Hyundai officials, a downsizing plan will be announced before the general shareholders' meeting, scheduled for March 30. The planned retrenchment follows the company's recent disposal of assets, including the sale of American subsidiary Symbios Logic for $775 million and the photomask shop in Ichon plant for $35 million. Hyundai, which has been reeling amid plummeting memory chip prices, is expected to withdraw from, among other areas, the money-losing computer business. The company plans to spin off the PC assembly and marketing division, which has been a drain on its resources. It intends to help division officials to set up a new company and take over the PC operation. Hyundai is also expected to transfer its server business to its sister firm Hyundai Information Technology, a system integrator which also operates the Shinbiro online service. Hyundai's move into the server business was consistent with a government policy aimed at cultivating domestic capabilities to build midrange servers, but its push for servers has only incurred losses. The company's server operation includes Axil Computer, a company in the United States, which manufactures enterprise servers. The American subsidiary is said to possess high technical competence, which was well demonstrated by its development of the world's first eight-way enterprise server. But it has failed to make a profit with its innovative product. Hyundai also plans to divest itself of divisions for set-top boxes, home automation appliances and ordinary phones, as well as its multimedia and system integration businesses. In addition, it will give up a plan to invest in Globalstar Korea, a joint venture it was expected to set up with Dacom to provide the Globalstar GMPCS (global mobile personal communications via satellites) services in Korea. Denying reports that Hyundai will completely withdraw from the nonmemory business, company officials said retrenchment has never been considered for both the memory and nonmemory operations. They added that three fabs which are now turning out low-end 1-megabit and 4-megabit DRAMs will be retooled for production of nonmemory chips. But the company will transfer its chip packaging division to ChipPac, a marketing subsidiary it incorporated in the United States. Hyundai officials said the downsizing program will allow the company to concentrate on such core areas as telecom equipment, mobile phones, liquid crystal displays, monitors, computer storage devices and components for vehicles, in addition to semiconductors. They added that, despite the retrenchment, job cuts will be minimized because most targeted operations will be spun off or transferred to other firms rather than being totally abolished.