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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (44158)	1/21/1999 10:39:00 AM
From: yard_man	Respond to of 132070

biz.yahoo.com FOCUS-Intel to invest $100 mln in S.Korea Samsung By Yoo Choon-sik SEOUL, Jan 21 (Reuters) - U.S. chipmaker Intel Corp (Nasdaq:INTC - news) has agreed to invest $100 million in South Korea's Samsung Electronics Co Ltd to expand cooperation in the next-generation memory chip industry, Samsung said on Thursday . Under the deal, expected to be formally signed by early February, Intel plans to buy $100 million worth of convertible bonds exchangeable into common shares equivalent to about one percent of Samsung's common shares, Samsung said in a statement. ''The proposed investment in Samsung Electronics is part of Intel's strategy to support the supply of next-generation memory products,'' the Samsung statement said. Samsung, the world's largest dynamic random access memory (DRAM) supplier, said it would spend all of the money in fabrication, assembly and test facilities for Rambus DRAM chips. The deal is a follow-up to Intel's decision announced in October to invest $500 million in Micron Technology Inc (NYSE:MU - news) in return for the right to buy common stock amounting to six percent of Micron's common shares. ''Intel has now joined hands with the world's two powerful DRAM makers, and therefore, has become able to develop the market for the new memory chip,'' said Jon Chong-hwa, an analyst at KEB Salomon SmithBarney Securities. The alliance with Samsung is an important boost to the Santa Clara, Calif.-based chip giant's efforts to accelerate adoption of the Direct Rambus DRAM as a new standard for microprocessors, the brain chips of personal computers, analysts said. ''This investment continues our long relationship with Samsung, the world's largest supplier in the memory market segment,'' Intel's vice president Patrick Gelsinger was quoted by the Samsung statement as saying. ''With this investment, our goal is to help ensure an adequate supply of Direct Rambus DRAM for the personal computer market segment over the next five years.'' Direct Rambus DRAM is a memory accelerating technology developed by Rambus Inc (Nasdaq:RMBS - news) that licenses its technology to Intel and almost every major personal computer maker. ''The deal will help not only Samsung but Intel hedge the risk from uncertain market trends,'' said an analyst at a Seoul-based securities company, who asked not to be identified. Intel is trying to encourage development of Rambus DRAM because it is considered a lower cost alternative to synchronous RAM chips with equal or better speed, analysts said. Analysts in Seoul said Intel was also expected to seek an alliance with another world-leading DRAM maker in South Korea, Hyundai Electronics Industries Co . Hyundai, which is due to acquire South Korea's LG Semicon Co to become the world's second-largest DRAM supplier, denied the speculation but said it could start negotiations with the world's major chipmakers for capital investment. The Samsung statement said the conversion price of the bonds to be subscribed by Intel had been set at 110,400 won ($94.1) per share. Samsung shares jumped on the news, rebounding to 92,500 won at one point from their daily low of 88,100, but retreated to close Thursday's trading 2,500 won lower at 89,500. Samsung said the bonds can be converted once the stock's spot price rises above the conversion price. The bonds will have a maturity of five years and an interest rate of five percent per annum, the statement said. ($1 equals 1,173 won)