Given the cutbacks that have swept all Korean conglomerates in the past year, it comes as no surprise that chip diversification plans are on the chopping block. The company last week declined to answer repeated inquiries on that subject. But on the other hand, they need cash. Hyundai's chip business had been the most diversified of the big Korean firms prior to selling Symbios, but today non-memory circuits represent about 15 percent of semiconductor sales, comparable to its Korean competitors. Besides reducing debt, selling off operations can give Korean chip firms a cash infusion needed to modernize DRAM operations, said Dan Hutcheson, president of VLSI Research.
Memories are money hogs.
If they don't put money into memory shrinks, they'll lose more there than they'd ever hope to gain by developing new products. Ever since it supplanted Japan as the dominant force in DRAMs in the early 1990's, Korea has sought to expand beyond commodity memory. Our problem is to progress beyond memory without sacrificing our strength in memory. But that has proved a stubborn obstacle. As of last year, logic chips represented just 10 percent of Samsung's semiconductor group sales, as opposed to 85 percent memory and 5 percent TFT displays, the company said.