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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Humblefrank who wrote (34047)	6/27/1998 1:14:00 PM
From: BillyG	Read Replies (2) \| Respond to of 50808

I think there are few reasons that Intel may be interested in LG Semiconductor: (1) As you said, to make up for the delay in upgrading Intel's fabs (LG has better deep submicron capability than Intel b/c of its DRAM expertise, but it doesn't have the same level of expertise in the multilevel metal fabrication that is required for complex microprocessors). (2) Intel needs a steady supply of cheap DRAMs in order to sell complex microprocessors. (3) LG builds fast Rambus RDRAM memory, which is designed to work with Intel's Merced processor. (4) LG has manufacturing rights for Chromatics' MPACT media processor line. In spite of Intel pushing SoftDVD, it needs a media processor or MPEG-2 decoder chip. (5) LG Semiconductor has ties to Zenith through its parent compny, and Intel may be interested in some of this technology for the PC-TV convergence wars. (6) Intel may be interested in LG's embedded DRAM technology. (7) LG needs cash for its operations. (8) LG Semiconductor needs to bolster its operations so that it can resist the rumored Korean government pressure for the "big deal" in which LG Semiconductor would be merged into Samsung Electronics. (Other rumored parts of the "big deal" involve Samsung Automotive being merged into Hyundai, and Hyundai Chemical being merged into LG.) (9) Intel can prevent LG Semi from being part of Samsung. Samsung is now producing the Alpha microprocessor in competition with Intel, and Intel probably doesn't want Samsung to gain additional manufacturing capacity. (10) With the current state of the Korean economy, the pice is right for Intel.