Possible Hundai Electronics/ LG Semicon Merger

-- Semiconductor International, 1/1/1999

Hyundai Electronics and LG Semicon agreed to merge with a paid-in capital of $2 billion in September 1998, after months of negotiations among Korea's chaebols. If the restructuring goes through, the new company will become the second largest memory chip maker in the world, after Samsung. Final agreement is still in the works. While the agreement may lead to delays in meeting orders, at least for the time being, both parties will continue to produce semiconductors separately.

The recent arbitration package offered by the chaebols' meeting specified that all preparatory works for the merger be completed by the end of 1998. If foreign capital flow is available, the management company will have 35% share of the total. Both sides agreed that the greatest benefit is in shared technologies, processes and production facilities. Industry pundits forecast the need for another investment valued at $380 million or more to maintain the current production scheme.