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March 29, 2024

SK hynix shares continue rally on Toshiba deal

PUBLISHED : June 22, 2017 - 15:25

UPDATED : June 22, 2017 - 16:05

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[THE INVESTOR] SK hynix’s stock continues riding high as a consortium including the Korea chipmaker was tapped as the preferred bidder for Japanese tech giant Toshiba’s NAND memory flash business unit.

As of 10:35 a.m. on June 22, the stock reached a high of 66,500 won (US$58.3), up 2.62 percent. The share price had risen 14.7 percent from June 7 to 21 thanks to the expectations about the Toshiba deal. 

After hitting 29,550 won -- an annual record low -- on June 21 of 2016, the stock has soared nearly 120 percent to 64,800 won on June 21, 2017.

The stock closed at 65,000 won on June 22.



Market analysts were upbeat about the firm’s business prospects.

“The recent selection as preferred bidder is another positive factor for SK hynix, as it can now try to bar the entry of new rivals from China or Taiwan in the NAND flash memory segment,” said Kim Rok-ho, an analyst from Hana Financial Investment. “Potential joint R&D projects between the Japanese memory unit and the Korean firm will also work in favor of SK hynix.”

On June 21, Toshiba announced that the consortium led by US private equity firm Bain Capital, the state-backed fund Innovation Network of Japan and the government’s Development Bank of Japan was chosen as the preferred bidder for the sale of its NAND flash memory unit. 

SK hynix is expected to spend some 3 trillion won, covering around 15 percent of the buyout price. The Toshiba deal, if successful, could serve as a great boon to the Korean chipmaker, which aims to enhance its presence in the global NAND flash memory sector.

Toshiba holds a 17.2 percent market share in the global NAND flash market, the second largest after Samsung, which has a 36.7 percent share, according to market research firm IHS. SK hynix comes fourth with 11.4 percent, while US-based Western Digital has a 15.5 percent share.

By Kim Young-won (wone0102@heraldcorp.com)

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