The Hyundai Group yesterday confirmed a report in The Times of London that it had been in discussions with Intel Corp aimed at saving its partly completed semiconductor plant in Fife, Scotland. But, said Hyundai, talks had now broken off. Hyundai and Intel failed to reach an agreement on the joint venture, Hyundai spokesman Lee Kwang-suk told Reuters, we plan no further talks about Scotland, but cooperation in other areas is possible. The Times report said that Hyundai and Intel had been discussing a $1.2bn joint venture intended to convert the 32Mb and 64Mb DRAM plant into a 256Mb DRAM facility. Hyundai was forced to pull the plug on the plant’s development earlier this year following South Korea’s financial crisis, and it never made it to the production stage. Speculation that Intel will step in to help the South Koreans has seen its name linked to Samsung Electric Co and LG Electronics before the Hyundai rumors surfaced. The Korean government-backed Financial Supervisory Commission has appealed for the three major chaebols, Hyundai, Samsung and LG, to consolidate their various businesses in order to make them more competitive. Among the suggestions is that LG passes on its electronics business to Samsung in return for Hyundai’s petrochemical business. This could possibly open up some kind of role for Intel as an investment ‘angel’ to prop up a more competitive DRAM business, and perhaps exit the company after it stabilizes. Intel might be hesitant to get itself too closely involved in DRAM. During the last DRAM crisis in 1986, Intel was forced to exit what was then its core business when the market was flooded by cheap chips from Japanese vendors. Last week Siemens AG said it would be closing its 16Mb DRAM plant in North Tyneside, England, having failed to find a buyer (CI No 3,465).
