Hynix, Toshiba to tie up for joint venture

By Kim Yoo-chul

Hynix Semiconductor and Toshiba plan to create a joint venture jointly develop magnetoresistive random access memory or MRAM products.

The tie-up of the semiconductor industry's No. 2 and No. 3 comes at a time when the nation's top mobile carrier SK Telecom and mid-tier conglomerate STX have filed to acquire a controlling 15.1 percent stake in Hynix owned by nine key shareholders.

"It is good news to shareholders and bidders because the Icheon, Gyeonggi Province-based Hynix will keep its status as a leader in the industry in advanced memory chips via the partnership," said an official at one of the firm's creditor banks, asking not to be identified, Wednesday.

"SK Telecom and STX are being pressurized to pay more premium to Hynix' shareholders," added the official. The 15.1 percent stake is currently valued at $2.4 billion.

Hynix is only trailing market leader Samsung Electronics in the global computer memory chip market by revenue; while Toshiba is the world’s third-biggest.

The announcement could be enough to threaten Samsung’s lead in the sector, officials and analysts said.

But Samsung spokesman Song Chul-gyu said the company has been spending more to speed up its development of advanced memory chips to replace conventional DRAMs.

``We don’t see any sudden leadership changes just because of the Hynix-Toshiba alliance,’’ Song said.

The joint venture’s MRAM products use magnetism to store data requiring less power than those using traditional electrical circuitry.

Most MRAMs that are now being developed write data by applying the magnetic field generated by a current running through a wire near a tunneling magnetoresistive (TMR) element.

The partnership is the second biggest in scale after it had formed an alliance with ST-Micro to jointly build a factory in China in 2004.

Hynix jumped to the world’s No. 2 in 2004 as that partnership helped strengthen its capability to boost production of profitable 12-inch wafer chips.

Senior Hynix spokesman Son Kyung-bae said the joint venture will set up production once technology development is completed, but declined to confirm expectations that manufacturing would commence in 2014.

Son said the company has extended the period of its cross-licensing deals with Toshiba for the second time since 2007 after it narrowed payment conditions for using some of the latter’s patents.

``MRAM products will be produced from the joint venture, which will help Hynix risk investment hedges and realize economies of scale,’’ said the spokesman.

Chip experts said MRAM is a very exciting technology, and manufacturers are working on different technologies to deliver a promised universal solution.

Conventional dynamic random access memory (DRAM) chips are being commoditized due to many market players, pushing top-level chipmakers to migrate to thinner, power-saving chip-making technologies.