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To: Bipin Prasad who wrote (40547)	10/30/1998 10:31:00 AM
From: sandstuff	Respond to of 53903

Here's a double whammy... Hyundai Begins Mass-Production of Advanced 64-Megabit Drams Seoul, Oct. 28 (Bloomberg) -- Hyundai Electronics Industries Co., one of the world's top 10 memory chip manufacturers, said it will start mass-production of smaller and more advanced memory chips from next month. The fourth generation of 64-megabit synchronous dynamic random access memory chips are half the size of the third generation and function 30 percent faster, the company said. Hyundai and two other South Korean electronics makers supply one third of the world demand for drams, which are widely used in computers, telecommunications and other multimedia equipment. Hyundai said it can produce between 400 and 450 new drams per wafer. Annual output of the new products will be one million a month this year and four million from next year. Hyundai has agreed to combine its semiconductor business with that of rival LG Semicon Co, although the two companies are still battling over control of the merged company. Hyundai shares rose as much as 2.8 percent to 22,000 won. Success of S.Korea chip firm merger in doubt By Kim Myong-hwan SEOUL, Oct 29 (Reuters) - The merger of South Korea's Hyundai Electronics and LG Semicon, touted just a few weeks ago as the first of many between the country's overweight conglomerates, may never happen. At least one company official says the merger, part of a heavily touted government plan to cut harmful competition and duplication of resources between Korean conglomerates, may prove unnecessary. ''We believe the semiconductor market would pick up next year,'' said an official at LG Semicon. ''If that turns out to be true, the merger plan may not be necessary from the beginning.'' ''I am not quite sure the merger of LG and Hyundai is being promoted on the basis of a solid assessment,'' he said. So far, Hyundai and LG have been unable to agree on much of anything, not even on who should act as a go-between in their larger dispute over which group would retain management control of the new semiconductor firm, which would command more than 15 percent of the world DRAM (dynamic random access memory) market. Analysts also have their doubts on whether the merger will proceed. ''Neither will want to make concessions on the management,'' said Lee Hahn-koo, president of Daewoo Research Institute. ''A lack of mutual trust may thwart the merger despite a great deal of synergy effects anticipated from the deal.'' The two chip makers have missed their own October 26 deadline to select a foreign consulting firm to oversee the merger. Hyundai favours Bain & Co, while LG's choice is A.T. Kearney. ''Hyundai and LG have agreed on the main points, but have yet to work out details in selecting a consulting firm,'' said Bang Min-ho, a spokesman at Hyundai Electronics. LG Semicon spokesman Hahn Sang-soo said Hyundai and LG were continuing to talk and would soon settle on a consulting firm. In September, the Hyundai Group and LG Group agreed in principle to merge their semiconductor units as part of industrial restructuring plans aimed at trimming excess capacity and avoiding duplicate investment. They said the consulting firm would decide by end-November which company would take a 70 percent stake in the new company. But analysts said the two companies were unlikely to reach agreement by that time given the complexity such a merger. ''First, any foreign consulting firms would refuse to be nominated on concerns of the loser cutting off business relations with them,'' said Henry Morris, director of Seoul-based business development firm IRC Ltd. ''In addition, I don't see any big changes after the merger. The single company will continue to have two labour unions, two financial departments and two of all other sections,'' Morris said. ''Then it will be more difficult to run such a company. Analysts said the two companies were pursuing the merger because the government wanted them to do so. But the head of the lobbying group for South Korea's conglomerates said on Wednesday the merger would take place. ''The merger of Hyundai Electronics and LG Semicon has been publicly promised,'' Kim Woo-choong, chairman of the Federation of Korean Industries, was quoted by a spokesman as saying. ''I believe the merger plan will go ahead as promised,'' said Kim, who is also chairman of the Daewoo Group South Korea's chip makers, heavily indebted to foreign lenders after heady expansion, have seen their debts balloon since late last year as the country's foreign exchange crisis sparked devaluation of the won currency. Hyundai Electronics' liabilities rose to 11.1 trillion won 45 billion) at end-June from 6.1 trillion won a year ago, while those of LG jumped to 6.7 trillion won from 4.0 trillion won, analysts said. Government and business have agreed the country's chip sector, which commands about 40 percent of the global memory chip market, should be rebuilt on two dominant makers -- the world's largest memory producer, Samsung Electronics, and the merged firm of Hyundai and LG -- to be competitive. ($1 - 1,313.30 won)