SEOUL, July 15 (Korea Bizwire) – After news of a Chinese state-owned company’s bid to take over US chipmaker Micron Technologies surfaced, Korean semiconductor makers like SK Hynix and Samsung Electronics saw painful losses to their share prices.
On July 14, Samsung Electronics declined 3.24 percent to 1,225,000 won, marking the biggest daily loss since May 27, and SK Hynix, the world’s second-largest chipmaker, plunged 6.66 percent to 37,850 won. Their stock prices fell after foreign media reported that Tsinghua Unigroup was willing to pay US$23 billion to buy the world’s third largest chipmaker.
The two Korean tech giants grabbed a record 75 percent share of the global mobile dynamic random access memory (DRAM) market in the first quarter, while Micron took a 22.6 percent share, according to industry tracker TrendForce.
Stock market analysts expect that it is unlikely for the Chinese chipmaker to take over Micron, but China’s deep interest in the chip-making industry will act as a downward pressure on their stock prices over fear of fiercer competition with Chinese makers.
Lee Ga-geun, a research fellow at KB Investment and Securities, said, “As the 19.3 percent premium seems too low for the takeover, a deal is unlikely to be reached. The stock price fall of Samsung and SK Hynix came from the overreaction of the market.”
The Chinese chip design company reportedly offered US$21 a share for Micron in a deal valued at US$23 billion, according to The Wall Street Journal.
By John Choi (firstname.lastname@example.org)