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SK Hynix pushes for takeover of overseas firms

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Published : 2012-06-20 19:47
Updated : 2012-06-20 19:47

Chipmaker acquires U.S. controller firm to boost NAND Flash  competence in latest M&A drive


SK Hynix said Wednesday it signed a contract to acquire U.S. controller firm Link_A_Media Devices to strengthen its NAND Flash competitiveness as it has been actively pushing for mergers and acquisitions since obtaining a new owner in February.

The company said it decided to take over the California-based storage solution firm, also known as LAMD, in a bid to upgrade the speed and reliability of its flash memory.

LAMD is a semiconductor system-on-chip solution developer for the data storage market, according to SK Hynix officials.

“We expect our NAND Flash competitiveness to be further strengthened through LAMD, which has extensive expertise in controller technology and excellent engineering resources,” said the firm’s chief executive Kwon Oh-chul.

According to SK Hynix officials, the role of the NAND controller in premium products such as embedded multimedia cards and solid state drives has become important to meet the high memory densities and improved interface speed demanded by users.

The move comes after the company said earlier in April that it is currently developing its own controller chip for NAND Flash memory to have it ready for production by 2014.

NAND Flash memory is widely used in wireless devices such as smartphones and tablet PCs.

Park Sung-wook, head of research and development at the firm, also hinted that the company may acquire foreign firms to operate an overseas controller development team, apart from SK Hynix’s proprietary controller development team in Korea.

The world’s second-largest dynamic random access memory chipmaker plans to inject 60 percent of its 4.2 trillion won facility investment in NAND Flash for the first time this year.

It also announced last week that it established a research and development center in Italy by acquiring Italian NAND Flash developer Ideaflash, which is a firm composed of 50 R&D experts with at least 12 years of experience.

Industry sources say SK Hynix’s aggressive acquisitions with overseas firms is viewed as evidence of SK chairman Chey Tae-won’s commitment to reinvigorate the chipmaker since the takeover in February.

Although the company dropped out from the bid for Tokyo-based Elpida Memory last month, the chairman has been stressing the importance of bold M&As for global competitiveness.

As the strongest player with a selling product portfolio in the global market among the SK affiliates, Chey has been expressing his high expectations for the semiconductor firm.

“Controller technology is one that is a must-get for SK Hynix and the sales of controllers, along with NAND Flash memory will improve the firm’s profit figures to a great extent,” said Lee Seung-woo, an analyst at IBK Securities.

SK Hynix’s shares closed at 24,800 won per share on the Seoul bourse on Wednesday, up 3.98 percent from Tuesday.

By Cho Ji-hyun (sharon@heraldcorp.com)

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