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To: DJBEINO who wrote (4563)	1/27/1999 10:12:00 AM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

Hitachi (6501) To End Technological Tie-Up With LG Semicon Wednesday, January 27, 1999 TOKYO (Nikkei)--Hitachi Ltd. will end its tie-up with major South Korean chip producer LG Semicon Co. over semiconductor production, Hitachi sources said Wednesday. Japan's electronics giant is revamping its chip business and has decided to end its technology transfer to the South Korean firm, which is expected to become a major rival after its merger with Hyundai Electronics Industry Co. Ever since signing a tie-up deal in 1989, Hitachi has licensed its precision fabrication technology needed to make 1- through 64-megabit dynamic random-access memories to LG Semicon and purchased a large number of DRAMs made by the Korean firm under an OEM arrangement. The alliance with LG Semicon was part of Hitachi's strategy to save capital investment costs and grab world market leadership. But such an expansionary policy has come under review in the wake of an expected loss of more than 100 billion yen in Hitachi's chip business in fiscal 1998 due to price slumps that began in 1996. Hitachi's decision to end the tie-up means that LG Semicon won't receive Hitachi's technology for enabling the manufacture of chips to a precision of 0.18 micrometer, which is regarded as crucial for making such advanced chip products as 256-megabit DRAMs and system chips. Hitachi aims to scale down its DRAM business and make all its own chips. The percentage of 64-megabit chips the company buys from LG Semicon has already fallen sharply to some 10% of Hitachi's needs, or less than half the previous levels, and purchases from the Korean firm are expected to end around 2000 when 256-megabit chips will become the main product in the chip market.