The continued economic crisis in the Far East has forced Hyundai Electronics Industries Co to sell its DVD business to Digital Video Systems Inc for an undisclosed sum. Under the terms of the deal, DVS has set up a new company called DVS Korea Co Ltd. Subject to regulatory approvals, the company will acquire the DVD manufacturing capabilities, research and development team and the management team from Hyundai. Sung Hee Lee, one of Hyundai’s senior executives, will also join the new company as managing director. The acquisition will enable DVS to manufacture DVD-ROM products almost in their entirety, leaving just the optics components to be sourced from a third party. DVD-ROM technology provides significantly greater storage capacity than CD-ROMs allowing, for example, multimedia PCs to play full, feature-length films. Digital Video Systems’ president and COO, Tom Parkinson said Korea’s current monetary situation has left Hyundai in a position where it has to focus on its core, memory chip business. But its not the first time Hyundai’s been forced to tighten its belt. At the end of last month, the Hyundai announced its Computer Systems group would be folded into its Hyundai Information Technology arm. (CI No 3,394). This followed the cessation of PC sales in North America and the rumor that the company was about to stop selling PCs to its local, Korean market too. At the end of last year, the company was forced to scrap plans to build two semiconductor plants in Scotland, valued at $3bn. (CI No 3,311).
