SK Hynix seeks talks to buy Korea-based chip contract manufacturer - media

FILE PHOTO: Employees walk past the logo of SK Hynix at its headquarters in Seongnam, South Korea, April 25, 2016. REUTERS/Kim Hong-Ji/File Photo

SEOUL (Reuters) - SK Hynix Inc, the world's second-largest memory chip maker, has requestd talks to acquire South Korea-based Key Foundry, a chip contract manufacturer, a South Korean newspaper reported on Monday.

SK Hynix has expressed intention to negotiate for the full acquisition of the 8-inch wafer foundry, Korea Economic Daily reported on Monday citing unnamed sources in the tech and investment banking industries.

SK Hynix said that it is considering various measures to expand its foundry business, but nothing has been finalised. A spokesperson for Key Foundry could not be immediately reached.

SK Hynix is already a minority investor in Key Foundry, having infused about 207 billion won ($181.93 million) into a private equity fund last year that owns the chip contract manufacturing firm, and now is interested in buying out the rest, Korea Economic Daily said.

Key Foundry has a chip manufacturing capacity of 82,000 8-inch wafers per month, and is the only pure-play foundry in Korea, with the ability to make chips for applications in the consumer, communications, computing, automotive and industrial industries, according to its website.

SK Hynix said last week that it is considering doubling its chip contract manufacturing capacity from a low base in ways that could include M&A.

Currently, memory chips make up almost all of SK Hynix's business, with logic chips including chip contract manufacturing only taking up 2% of revenue.

($1 = 1,137.8300 won)

(Reporting by Joyce Lee, editing by Louise Heavens)

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