Infineon, Micron Criticize Latest Hynix Bailout
Online staff -- EDN, January 3, 2003
As widely expected, memory manufacturers in the U.S. and Europe have reacted with strong criticism to the most recent financial bailout of their South Korean rival Hynix Semiconductor Inc.
Munich, Germany-based Infineon Technologies AG today joined Boise, Idaho-based Micron Technology Inc. in offering public criticism of the rescue package.
Hynix creditors on Monday voted to keep the company float by transferring about $1.6 billion in debt into equity and rescheduling a further $2.5 billion (3 trillion Korean won) of maturing debt. The bailout effectively eases Hynix's $6 billion debt, reducing it to about $2 billion.
Infineon has charged the bailout represents more unfair competition in an already pressured sector. Earlier this week Micron told Dow Jones it believed the bailouts of Hynix are in clear violation of free market principles, and of World Trade Organization and U.S. trading laws.
“Infineon presented evidence to the European Union in mid-2002 that contributed to a decision by the EU to investigate undue subsidies and market-distorting practices by Korean DRAM producers,” said an Infineon spokesperson. “The recent decision is not consistent with fair competition and continues the violation of World Trade Organization rules that we believe has occurred.”
The U.S. Commerce Department, the International Trade Commission and the European Union are each investigating charges that the South Korean government has paid subsidies to local manufacturers of DRAM chips, including both Hynix and Samsung Electronics Co. Ltd. The investigations were sparked by official complaints filed by Micron and Infineon.
