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Consortium set to buy Hynix plants in Korea.

Byline: From Register-Guard and wire service reports

A group of South Korean computer-chip design companies on Monday said it plans to buy some of Hynix Semiconductor Inc.'s chip factories - but not the one in Eugene.

In a news release, the consortium of 10 companies said it plans to buy four or five Hynix factories in Korea that make nonmemory chips.

The Eugene factory, temporarily idled for an equipment upgrade, makes memory chips.

The consortium said it expects to sign a tentative agreement "soon" and to complete the sale by March, Dow Jones Newswires said.

If the deal goes through, it would leave Hynix with just seven or eight chip factories in Korea, plus the Eugene plant.

Hynix declined to comment on the consortium's statement. However, Hynix in the past has said it is in talks with some companies in the consortium. A sale of nonmemory chip factories would be in line with Hynix's survival strategy of spinning off noncore functions and focusing on memory chip production.

Hynix says it must sell off assets in order to raise cash that it needs for ongoing expenses and to handle its $6.7 billion debt load.

Memory chips, such as the 256-megabit dynamic random access memory, or DRAM, chip that Hynix says it has started to make in test production at the Eugene factory, are used in personal computers. Nonmemory chips are used in cellular phones and similar devices.

The chip-design consortium said it hopes to raise up to $1 billion from investors to launch its venture, called Beyond Micro Inc., and to buy the Hynix factories. The companies are being led by Korea-based Aralion Inc.

Aralion President Jeong Ja-choon said Beyond Micro would move ahead with its bid regardless of ongoing talks between Hynix and Boise-based Micron Technology Inc. Hynix and Micron have said they're looking at some kind of alliance, and Micron officials have visited the Eugene plant as part of their inspection of Hynix operations.

Meanwhile, in another development, Hynix and rival Samsung Electronics Co. said worldwide demand for personal computers appears to be rebounding, a trend that bodes well for memory-chip prices, Bloomberg News reported.
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Title Annotation:Business
Publication:The Register-Guard (Eugene, OR)
Geographic Code:9SOUT
Date:Dec 18, 2001
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