Hynix stock tumbles on strike fear


Shares in Hynix fell sharply Tuesday after reports of possible labor action

Staff and wires

SEOUL, South Korea -- Shares in South Korea's Hynix Semiconductor tumbled Tuesday after its union warned of possible strike action.

The union at the country's No. 2 memory chipmaker said it might strike to protest the proposed $3.4 billion deal to sell most of Hynix's operations to U.S. rival Micron Technology, Reuters news agency reported.

Shares in Hynix were down 14.47 percent at 1005 won by the close, against a gain of 0.52 percent for the main Kospi index.

"We are still against the sale of Hynix. We will stage a strike if needed," union leader Chong Sang-yong told Reuters by telephone. He did not elaborate.

Hynix fell 6.74 percent on Monday ahead of the announcement that a memorandum of understanding had been signed under which Micron would buy Hynix's memory chip business.

Deal needs approvals

That would make it the world's largest memory chipmaker, ahead of current No. 1 Samsung Electronics.

The Hynix-Micron deal requires board approval from both companies and support from creditors and shareholders.

If it proceeds, it would see third-ranked Hynix exit the memory sector to focus on non-memory chips used in mobile phones and other devices.

A high-ranking creditor official said Micron would retain at least 85 percent of the workforce at the six Hynix memory chip plants it aims to buy, Reuters reported.

Individual investors own most of Hynix's one billion shares. The value of those shares would likely be affected if Micron strips out memory operations that generated 70 percent of Hynix's business last year.

Shares in Micron rose $1.40 in the U.S. on Monday to $30.90.