Chip industry closely watching SK hynix's decision on MagnaChip bid

South Korea’s chipmaking industry is watching closely an ongoing bid for the foundry business and fabrication line of MagnaChip, which was formerly owned by SK hynix, according to the industry on Tuesday.

Officials in the semiconductor industry have named SK hynix as one of the most likely candidates for the acquisition of the foundry business and factory of MagnaChip, based in Cheongju, North Chuncheong Province, in the vicinity of SK hynix’s M15 memory chip plant.

MagnaChip, which saw $751 million in sales last year, was part of SK hynix until 2003, before the chipmaker was acquired by SK Group. 

The entrance of SK hynix's fab in Cheongju (SK hynix)

SK hynix is reportedly mulling taking back the foundry unit of MagnaChip, according to news reports, as part of the memory-focused chipmaker’s strategy to foster non-memory business within the company.

However, SK hynix has declined to comment on the possibility.

“There are voices that say SK hynix should take part in the bidding in order to prevent potential technology leaks to China,” an industry official said. “Some also consider the MagnaChip deal as momentum for SK hynix to start the non-memory business amid growing calls for industry efforts to strengthen non-memory business competitiveness.”

When SK hynix went through corporate restructuring in 2004, the chip design and manufacturing business was sold to a consortium of Citigroup Venture Capital in the United States.

MagnaChip is now owned by multiple financial investors, including Brigade Capital Management with a total 79.41 percent stake.

The company recently decided to sell its foundry plant Fab 4 and business unit, with a plan to announce preferred bidders by the end of this month at the earliest.

Chinese asset management firms and foundry businesses have been mentioned as likely bidders for the Korean chip business. 

By Song Su-hyun (song@heraldcorp.com)

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