Wednesday, December 9, 2015
SK plans to establish a joint venture focusing on semiconductor components to further bolster its footprint in the semiconductor industry, in which its affiliate SK hynix has a solid position.
"SK is seriously considering forming a joint venture with a Japanese company," said an official who is familiar with the matter by telephone, Monday. "Terms of the details, such as management rights and investment portions of the venture, will be decided soon."
He declined to specify the name of the potential investor SK is negotiating with, though the official stressed that the group will never stop exploring mergers and acquisitions (M&A) with companies in the semiconductor industry.
SK hynix said it has no comment about the issue, while SK Group spokesman said it is eyeing firms in Japan and the United States for M&A targets.
Since SK acquired SK hynix, formerly known as Hynix Semiconductor, the conglomerate has been accelerating its efforts to realign the group-wide business portfolio focusing on memory chips, impressed by SK hynix's track records of generating cash as the industry has been reshaped into a few major players.
Earlier, SK acquired a controlling stake worth 481.6 billion won in industrial gas maker OCI Materials.
OCI Materials is a global leader in gases critical to technologies including semiconductors, displays and solar panels. It is a top producer, especially of nitrogen trifluoride (NF) gas used in chip-making.
"In an era of uncertainty, establishing joint ventures will be the right and stable strategy to hedge investment risks. As chip manufacturers are investing more in advanced technologies, the establishment of semiconductor component ventures will help the group find new customers by lessening its financial burden," said another official.
Bernstein Research said the brokerage expects a stronger rebound in building chips next year, in terms of end-demand for both DRAM and NAND.
"We examined the end-demand for both DRAM and NAND based on the pace of smartphone inventory for 2015. We can expect DRAM to be in slight undersupply in 2016 and thus we remain positive about DRAM makers such as SK hynix," it said.
By the third quarter, SK had on hand 8.65 trillion won in cash. Total cash-equivalent assets were 30.66 trillion won.
Some say SK's aggressiveness to boost its position in the semiconductor industry is because SK Chairman Chey Tae-won plans to change its corporate structure. SK hynix is controlled by SK Telecom, which is a key affiliate of the group and also the nation's top mobile carrier.
"SK hynix' influence on the entire group is growing," he said. "OCI Materials' value is expected to soar in line with its initiatives to power up the semiconductor business."
By: DocMemory
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