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Hynix airs merger plan with Micron.

Byline: From Register-Guard and news service reports

More details of Hynix Semiconductor Inc.'s potential alliance with Micron Technology Inc. emerged Friday, as Hynix confirmed that it is considering a full, or at the least, a partial merger with Micron.

Micron made a merger proposal in the latest round of negotiations with Hynix delegates who visited Micron's headquarters in Boise last week, Hynix said in a news release.

The release followed a South Korean news agency report Friday morning that said Hynix has decided to sell its memory-chip operations - which include the Hynix chip plant in west Eugene - to Micron. Under that scenario, Hynix would retain its nonmemory-chip operations in Korea, the Yonhap News Agency said. Yonhap cited unnamed sources involved in Hynix's financial restructuring. Hynix quickly denied the report.

In Friday's news release, the committee of executives set up by state-controlled creditors to restructure struggling Hynix said the negotiations focused on Micron's proposal that the two companies merge entirely or partially.

The committee said that if the Micron and Hynix memory-chip operations merged, the two companies could form an alliance in the nonmemory field as well by swapping stock.

Hynix officials previously have said that they would prefer stock swaps as a means of forming a strategic alliance rather than handing management power to Micron.

Last week's negotiations between Hynix and Micron followed a broad, vaguely worded announcement earlier this month by the two memory chip makers that they would explore a "strategic alliance" and ``other options'' - which industry experts speculated could mean a merger.

Micron has a range of chip-making operations around the world.

Hynix has 12 chip plants in Korea, plus the Eugene factory. About half the Korean plants make memory chips, and half make nonmemory chips. Hynix is upgrading the Eugene factory to make 256-megabit dynamic random access memory chips.

The company in July laid off 600 of the factory's 800 workers and earlier this month said it has hired back 150, for total employment at the plant of 350. Hynix officials have said in the past that they intend to rehire all the laid-off workers and re-open the plant for commercial production next month.

That rehiring is already under way, according to one laid-off Hynix worker who said he is being recalled to the plant. The worker, who asked that his name not be used, said Hynix in recent days has launched a broad recall with the aim of ramping up chip production in mid-January. The worker said many former Hynix employees have received phone calls or letters in recent days inviting them to report back to work. Former Hynix workers who have stayed in the Eugene area keep in close touch with each other and share news about the factory's planned reopening.

A Hynix spokesman in Eugene did not return calls seeking comment about the worker recall.
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Title Annotation:Chips: Rehiring in Eugene is reported as alliance talks progress.; Business
Publication:The Register-Guard (Eugene, OR)
Geographic Code:1USA
Date:Dec 29, 2001
Previous Article:Obituaries.
Next Article:Business Digest.

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