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To: Chas who wrote (42235)	1/14/1999 10:34:00 AM
From: DJBEINO	Respond to of 53903

Hyundai Tries to Sell LG Wales Plant to Samsung 01/14, 20:50 Hyundai Electronics Industries, currently negotiating the purchase of LG Semicon, is reportedly considering selling LG's uncompleted chip production plant in Wales to Samsung Electronics. While the report appears to be premature, since the negotiations to acquire LG are still in progress, industry experts believe that HEI will have little alternative but to sell the units in Newport, Wales. One HEI executive, emphasizing that it is his personal opinion, said it makes sense since Samsung does not have a semiconductor manufacturing facility in Europe and the facility is already half done. ''For HEI, it would be difficult to proceed with the completion of both the plant in Scotland and Wales so the option would be to sell to a foreign company or Samsung,'' said the official, who asked not to be named. Both plants were put on hold amid the financial crisis at the end of 1997 but HEI's acquisition of LG Semicon, and the projected improvement in market conditions, means that it will have to push ahead with at least one project. There are good reasons for wanting to dispose of the Wales' plant. For one thing, LG has received considerable incentives, including $100 million in cash, from the Welsh government for investing $2.7 billion in Newport. Should LG, or HEI, be unable to keep their end of the bargain, they will have to cough up many of the incentives that LG has thus far received, which might cause discomfort between Wales and the Korean government. ''We are naturally not at a stage where we have to discuss such consequences and we would really like to see the projects move forward,'' said Hwang Jae-pil, vice president of the Seoul operation of the Welsh Development Agency. He said WDA must be very careful about how it handles the issue since it is very sensitive, with the semiconductor plant being located just across the street from the production facilities of LG Electronics. Hwang said, ''We are not really in a position to approach any of the parties involved, although WDA's top management will be in Seoul shortly to discuss various possibilities with LG.'' According to one source at the British Embassy, LG has been negotiating with parties in Singapore and elsewhere in hopes of securing investments to turn the plant into a facility for liquid crystal displays. Samsung officials said little consideration has been given to the possibility of it taking over the Newport plant since this would run counter to its over overseas business strategy. ''Right now we really do not have the financial resources to buy out the plant and stock it with processing facilities. Besides, we have plenty of facilities which are not in full operation,'' one official said. He went on to say that if additional investments are made in facilities, they will have to be used to develop the next generation of dynamic random access memory (DRAM) chip. It is highly unlikely that such facilities would be located overseas, he added. ''We are monitoring developments in the market to see how we can strategically meet demands without getting into an oversupply situation. If the price is right, we could consider the option,'' the official said. Even if the price is not right, there is also a strong possibility that the Korean government will step in to ensure that the project proceeds in the right direction since it could very well emerge as a troublesome issue. ''We have not really considered the problem since we are currently dealing with a much larger one, the merger that is. In due time, we will have to carefully review the options,'' said one official of the Ministry of Commerce, Industry and Energy.