Representatives of Micron Technology and Infineon AG commented on the creditor’s bailout of Hynix Semiconductor that was approved on Monday, 30th of December, 2002. The board of lenders admitted to perform another debt-for-equity swap worth about $1.58 (1.60) billion and also roll over about $2.5 billion by 2006. Infineon said that the move had meant more unfair competition in an already pressured sector and Micron called it as “ongoing subsidies” that harm their business.

According to Micron’s quotes by EBNews, the decision had been made despite ongoing US Department of Commerce and International Trade Commission investigations into nearly $12 Billion worth of similar bailouts in recent years and an ongoing investigation by the European Union into those same improper subsidies. The bailout decision had been also made despite repeated protests in recent weeks by US Congressional representatives and the US Embassy in Korea to stop further government subsidisation of Hynix. Micron also accuses the South Korean Government of subsidising the semiconductor maker indirectly by asking state-run banks to provide debts to BOE Technology Group in order to help them purchasing Hynix’s share in Hydis, the TFT-LCD business unit. Most Hynix creditors - including Korea Development Bank , Chohung Bank and Woori Bank - are state-run. The government owns 43% of Korea Exchange Bank.

Obviously, Micron promised to continue objecting to the “ongoing illegal subsidies”. They promised to prove that the Korean Government's continued, billion-dollar bailouts of Hynix were in clear violation of free market principles and of WTO and US trading laws. In fact, other memory makers, including Hynix, can accuse Micron in dumping policy in Summer 2001 when DRAM prices started to decrease dramatically also due to Micron’s promotional campaigns.

The main goal of Infineon and Micron is to as soon as possible stop the subsidies that will be needed by Hynix in order to upgrade their facilities. In case the management board finds funds (probably among foreign investors) to upgrade the facilities, the struggling semiconductor company will become profitable and will be able to start paying the debts back. Of course, even before they actually begin to earn money, they definitely influence the DRAM market that is not good for Micron and Infineon, who want less memory makers to stay afloat, as DRAM prices are likely to rise in this case.

See also:

- Hynix Semiconductor Received $4.1 Billion Debt-Relief from its Creditors!
- Hynix Semiconductor’s Creditors to Meet On Monday. Everything is Already Decided...
- ITC Confirms Korean Government Subsidised DRAM Makers
- Micron Countervails Korean Government To Subsidy Samsung and Hynix
- Hynix: Between Samsung and Micron
- Micron Reports Financial Results for the Fourth Quarter and Fiscal 2002
- Micron Speaks About DRAM Market. Doubts it Will Buy Hynix