Drift of Hynix Renegotiation

Steven R. Appleton, the president of Micron Technology publicly expressed its intention for resume of acquisition negotiation of Hynix.

Hynix creditors divided the Hynix into △Memory △Non-memory △TFT-LCD. They have executed the due diligence for liquidation by dividing the remaining business as others.

It is estimated that the Hynix sales renegotiation will be started after completing the work of Spilt-off. Because it meets the political situation, many barriers are expected.

In the interview with EE Times on July 6, Appleton said “Micron believe that it will reopen the negotiation with Hynix. Micron can overcome a resistance of Hynix labor union”.

He said, “When Hynix solves the pending issues and its process is reasonable, we will open a door certainly. When the contact is made again, we will consider the negotiation”. It means that we will start the renegotiation when creditors complete the 3rd workout such as the spilt-off and debts writing-off and holds the board of directors of Hynix.

Analysis shows that the price of D-RAM has been increased in semiconductor companies, and so it will possibly fund a breakthrough through the disposition negotiation between two companies because of the big extent of deficits between Micron and Hynix.

As Micron has the deficit continuously for 6 quarters, the company has been in not good situation to the extent where it is subject to the downward of Moody’s crediting. It is forecasted that Hynix will have a deficiency of capital again in the beginning of the next year when the semiconductor price largely doesn’t increase.

However, selling Hynix dirt cheap will be argued because the Hynix labor union and small shareholders will repel and the stock price of Micron decreases to $20 which is the half as of the 1st negotiation.

Do-Young Kim Jeong-Hun Park nirvana1@donga.com sunshade@donga.com