Mating Dance?
By Kim Yoo-chul
Staff Reporter
A rare trip by the chief executive of POSCO to Hynix Semiconductor is raising speculation that the steel giant is interested in the world's No. 2 memory chipmaker.
"POSCO CEO Chung Joon-yang visited our technology compound in Icheon, Gyeonggi Province, to boost his understanding of the memory chip industry," Hynix CEO Kim Jong-kap told The Korea Times by telephone, Wednesday.
"But his visit doesn't have any link to market speculation over POSCO's possible interest in bidding for us," Kim added.
According to POSCO and Hynix officials, Chung was briefed about Hynix's operations for over two hours.
Chung's visit came after major shareholders of the memory chip producer began ramping up efforts to find a buyer.
A 28.1 percent stake in Hynix mainly owned by Korea Development Bank (KDB) and Korea Exchange Bank (KEB) is now up for sale.
Prospects for the sale have brightened as the global chip industry is showing signs of recovery from a years-long slump driven by industry consolidation and a price upturn of benchmark DRAM prices.
"As far as I know, KEB is contacting two or three potential buyers for the stake sale as the shareholders generally reached a broad consensus to push the stake sale amid the industry upturn," a high-ranking KDB executive said.
POSCO and Hyundai Heavy Industries are known as possible bidders considering their stable internal cash reserves, though the companies declined to confirm market rumors.
As of the end of July, POSCO's cash holdings were nearing 2.5 trillion won. POSCO, which has embraced mergers and acquisitions (M&A) as its top priority for further external growth, jumped into the bidding for Daewoo Shipbuilding & Marine Engineering (DSME), last year.
"That's a private and usual visit. It's an exaggeration to say that Chung had an in-depth meeting with our CEO over the M&A issue," Hynix spokesman Park Hyun said.
"We are busy expanding our footprint in the steel industry to better compete with our bigger overseas rivals such as Arcelor-Mittal," a POSCO spokesman said, adding his company doesn't have a strong interest in jumping into the memory chip business.
Market analysts say it is unlikely for POSCO to buy Hynix's shares for the time being as the steel maker is in the process of finalizing the internalization of its key business.
"POSCO's possible bid for Hynix is plausible. But it is an open question whether POSCO wants to include the volatile chip business in its portfolio," an analyst at Prudential Investment said.