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Micron and Hynix talks break down

SHARE Micron and Hynix talks break down

BOISE — A Micron spokesman said Sunday that talks between Micron Technology and Hynix Semiconductor have broken down and no new discussions are planned.

Boise's Micron has been negotiating for at least two months with Korea-based Hynix for some type of alliance or purchase that would have created the world's largest memory chip company. Micron is the world's second largest memory chipmaker, while Hynix is the third.

The latest round of talks took place last week at an undisclosed location in California and broke off Thursday, Micron spokesman Sean Mahoney said.

The most recent negotiations had been expected to end with a memorandum of understanding.

"No agreement has been reached, and no further talks are planned at this time," Mahoney said.

In the past, Micron's strategy has been to expand in troubled economics by acquiring competitors at bargain-basement prices. Micron officials have said that except for world-leading Samsung, they were approached in 2001 by nearly every memory-making competitor about some kind of possible alliance.

Micron officials declined Sunday to say whether they are negotiating with other companies besides Hynix or to comment on why the talks suddenly ended.

The Seoul Economic Daily reported that another round of talks will take place next month. Mahoney disagreed.

"There are no further talks scheduled," he said.

Talks have been shrouded in secrecy, with Micron confirming only that talks were taking place but otherwise staying mum on the subject.

The meeting was the third round of negotiations since the two parties agreed in early December to seek a strategic alliance and consider other options that industry officials said could lead to a merger.

Hynix's troubles worsened this year amid sagging global demand and falling prices for memory chips. Hynix owes more than $6 billion to banks in Korea, and many analysts said that if the deal with Micron does not go through, Hynix could fail.

Just last month, Micron signed a deal to buy Toshiba's DRAM memory business in Virginia for $250 million and 1.5 million shares of Micron stock. That deal is expected to close by June.