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Recovery of chip market helps Hynix.

Byline: staff and wire reports The Register-Guard

If computer memory chip prices keep increasing, Hynix Semiconductor Inc. should have the financial strength to remain independent, a senior South Korean official said Wednesday.

Hynix has been considering selling some of its operations, including the west Eugene chip plant, to Micron Technology Inc. of Idaho in order to raise cash. But Shin Kook Hwan, Korea's newly appointed minister of commerce, industry and energy, said Hynix won't need to proceed with a sale if chip prices stay high.

The industry-standard 128-megabit dynamic random access memory chip rose to $3.55 on Wednesday on the spot market. It has risen from about $2.50 earlier in January.

"If the 128 DRAM prices goes above $3.50, Hynix can survive on its own," Shin said.

Shin previously was head of the creditor-appointed committee in charge of restructuring Hynix, which is laboring under $6 billion in debt.

In a related development, Hynix on Wednesday said it will stop selling memory chips on the spot market through the end of March so that it can focus on meeting growing demand from its long-term customers.

``Due to an increase in demand and a supply shortfall, Hynix has elected to apportion memory products to its strategic and contractual customers for the remainder of the first quarter 2002,'' the company said in a news release.

The recovery of the memory chip market is welcome news for the world's third-largest memory chip maker. Hynix lost $3 billion last year amid sagging memory chip demand. The company has a dozen chip plants in Korea and one in west Eugene.

``If this keeps up, Hynix can survive on its own,'' said Jin Young-hoon, a semiconductor analyst at Daishin Securities Co. in Seoul.

Hynix said it has not decide what it will do beyond the first quarter.

Demand for memory chips rose with growing sales of Microsoft's new Windows XP operating system and consumer electronics like digital video disk players, Hynix said.

Hynix's long-term customers include IBM, Compaq and Hewlett Packard.

Hynix has been in talks with U.S. Micron Technology Inc. since December to form a strategic alliance, but the negotiations stalled last week. Micron has offered about $3 billion for six memory-chip plants in Korea and the Eugene plant, while Hynix has demanded $5 billion, according to Korean news reports. In a report Wednesday, Korea Economic Daily said Hynix and Micron were now talking in the $3.5 billion to $4 billion range.
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Title Annotation:Computers: A Korean official says the company may not have to sell its operations after all.; Business
Publication:The Register-Guard (Eugene, OR)
Geographic Code:9SOUT
Date:Jan 31, 2002
Previous Article:Business Beat.
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