Hynix shares up on talk it seeking ProMOS stake

SEOUL (Reuters) - Shares in Hynix Semiconductor Inc (000660.KS: Quote, Profile, Research, Stock Buzz) and Taiwan's ProMOS Technologies (5387.TWO: Quote, Profile, Research, Stock Buzz) jumped more than 3 percent on Thursday on market talk the world's No. 2 memory chip maker may buy a stake in its smaller Taiwanese rival.

Hynix and ProMOS declined to comment. ProMOS was due to hold an investor conference at 0600 GMT and a spokesman said it would announce a new partnership on more advanced technology. He declined to give any other details.

By 0300 GMT (11:00 p.m. EDT) Hynix shares were up 3.18 percent to 29,150 won after touching 29,300 won. In Taipei ProMOS shares were up 1.9 percent to T$8.43 by 0311 GMT after touching T$8.57, defying a 0.75 pct fall on Taiwan's main exchange.

On April 23, sources said Japan's top memory chip maker Elpida Memory (6665.T: Quote, Profile, Research, Stock Buzz) would buy a single-digit stake in ProMOS, making it ProMOS's third biggest shareholder, through a private placement.

There had been speculation that, as a result of the tie-up, ProMOS could end its existing technology licensing agreement with Hynix.

But Taiwan's Economic Daily reported Thursday morning that Elpida and ProMOS had failed to reach any deal, quoting a knowledgeable source.

Elpida declined to comment.

Hynix, Elpida, sector leader Samsung Electronics (005930.KS: Quote, Profile, Research, Stock Buzz) and other players in the dynamic random-access memory (DRAM) chip industry have struggled with a sixteen-month-long market downturn. Most chip makers have posted losses over the past several quarters, hurting their cash positions.

"ProMOS and Hynix had a relationship previously, but it sort of fell apart after Hynix strengthened its ties with Elpida," said Jay Kim, an analyst at Hyundai Securities.