Micron comes calling.

Byline: The Register-Guard

Micron Technology Inc. lost $266 million in the last quarter, pushing its loss over the past four quarters past the $1 billion mark. That's what a healthy computer chip-maker looks like.

For an unhealthy one, look at Hynix, which lost nearly $3 billion over the past nine months and is staggering under a $6.7 billion debt. An alliance between Micron and Hynix offers the promise of a lifeline to the latter company, including its chip-making plant in Eugene.

Micron, based in Boise, seems to be positioning itself for a turnaround in the chip manufacturing business, which is currently suffering its worst slump in history.

Just this month Micron bought Toshiba Corp.'s chip-making plant in Virginia, thereby absorbing a rival that controls 7 percent of the world market in dynamic random access memory chips. The deal gave Micron a chip-making plant at a fraction of the cost of building a new production facility, while also eliminating a source of competition.

Hynix produces 19 percent of the world's DRAM chips and is the No. 3 chip-maker, behind No. 2 Micron. The two are expected to announce some sort of partnership in January, vaulting ahead of Samsung Electronics Co. to become the world's largest chip manufacturer. Such an alliance would fit a recent pattern of mergers, with Hitachi and NEC combining to form Elpida and Hyundai teaming up with LG Semiconductor to form Hynix.

The Eugene plant is one of Hynix's most attractive assets, and gaining at least partial control of it may be Micron's primary motive in pursuing a deal. Hynix suspended production of 64-bit DRAM chips in Eugene in July and began a $156 million upgrade at the plant. The plant is now producing test batches of 256-bit DRAM chips. The more powerful chips are likely to be more profitable when the chip business as a whole eventually recovers.

As with the Toshiba acquisition, Micron's goal appears to be to obtain an interest in the Eugene plant at a bargain-basement price. The Idaho company would add 256-bit chip production capacity without spending large amounts of time and even bigger amounts of money to build a new plant of its own. The financial markets seem to like the idea: Both Micron and Hynix saw their share values rise when news of a pending deal was released.

A Micron-Hynix deal would be good for Eugene, where the chip plant employs about 800 people at full production. Hynix's willingness to invest in the plant even in a period of severe financial distress has been highly encouraging. In partnership with Micron, which remains financially strong, the Eugene plant's prospects would be even better. The Eugene plant could be a key to Micron's plans to emerge from the slump as the world's dominant chip-maker.

It's likely that no one at either company can say whether a second or third phase will ever be added to the Eugene plant. Chip-making facilities are most efficiently clustered in threes, with one plant usually being shut down for upgrades. Though a re-opened Eugene plant would be one of the most advanced of its kind, a stand-alone plant is vulnerable in the long term.

But for now, Micron's interest is good news for Hynix in Eugene, and better news than most of the reports from Lane County's high-technology industry in this difficult year.