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SK Hynix Bids for Elpida Memory
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SK hynix Inc. the world's second-largest memory chipmaker said Friday that it submitted a letter of intent to buy bankrupt Elpida Memory Inc. as part of its effort to become the top industry player.

The company, formerly Hynix Semiconductor Inc., said in a regulatory filing that it forwarded an initial offer earlier in the day to meet the bidding deadline.

"A final decision on whether to make a formal bid will be made after the due diligence of the Japanese chipmaker is carried out," it said.

The move comes after the South Korean chipmaker was incorporated into SK Group, South Korea's third largest conglomerate on Monday. Elpida filed for bankruptcy protection on Feb. 27 after it continued to loose money in the face of weak global demand and stiff competition.

Local industry watchers said that because SK Group is flush with cash from earnings generated by its flagship SK Telecom, the country's largest mobile operator, it has a fair chance of buying the company.

They speculated the conglomerate could pool at least 1.5 trillion won (US$1.32 billion) in cash for the bidding. SK hynix is expected to invest around 4 trillion won this year to improve its facilities and overall competitiveness.

"If SK hynix becomes the new owner of Elpida, it would have a global market share exceeding 30 percent that could challenge the position of Samsung Electronics Co., the world's largest memory chipmaker," an analyst said.

At present, Samsung hold 44 percent of the world's memory chip market, with SK hynix trailing at 23 percent.

Besides SK hynix, U.S.-based Micron Technology Inc. and Japan's Toshiba Corp., are taking part in the bidding process that may conclude in May.

Source Text


Source: Yonhap News (Apr. 3, 2012)

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