Hyundai Sells Symbios For $775m

Hyundai Electronics has sold Symbios Logic, its US non-memory chip subsidiary, to Adaptec in a $775 million deal to help ease financial troubles at the South Korean semiconductor company.

Hyundai Electronics is the smallest and most indebted of Koreas three main chipmakers, which include Samsung Electronics and LG Semicon.

It has already postponed a memory chip plant in Scotland because of problems raising overseas capital for the project.

Hyundai bought Symbios Logic in 1995 from AT&T for $340m to try to develop operations in non-memory chips, which enjoy a bigger market and have higher profit margins than its main business of memory chips.

 

A sharp fall in prices for memory chips in the past two years has forced Hyundai Electronics, which is expected to [Imareport losses for 1997, to retrench.

Symbios Logic was one of the most successful of recent Korean overseas ventures, posting a net profit of $69m on sales of $620m last year.

The deal is significant because it is the first profitable unit that a leading Korean conglomerate has sold and it is a sign that Hyundai is willing to restructure, said Brian Hunsaker, an analyst with Dresdner Kleinwort Benson in Seoul.

Korean conglomerates, or chaebol, have been criticised by the government for reluctance in reducing their sprawling industrial empires despite the nations debt problems.

Kim Yong-hwan, Hyundai Electronics president, said proceeds from the Symbios Logic sale would be used to finance projects in memory chip production, including completing a chip plant in Eugene, Oregon, Hyundais first US production site.