Korean chaebols to shrug off government demands
No respite for DRAM producers
The three top South Korean family conglomerates (chaebols) which manufacture DRAM are fighting off further attempts by the government to force them to swap their business, it has emerged. At the end of last week, President Kim managed to get Hyundai, Samsung, LG, Daewoo and SK to sign a “letter of intent” in which they would exchange business units. Hyundai, Samsung and LG have been under pressure both internally and externally to swap their production of memories, as prices have slumped worldwide. President Kim has repeatedly asked these three to come to some deal, as South Korea has come under attack from both US and European manufacturers for alleged anti-dumping. In September, the European Union is meeting to discuss whether or not to impose swingeing duties on the South Korean DRAM manufacturers, following rumours of a complaint from Siemens, which shut down a memory fabrication plant in the UK earlier this month. But now, according to local English language newspaper the Korea Herald, the South Korean chaebols are likely to exchange only a handful of small business subsidiaries, rather than industries like DRAM, petrochemicals and the automotive industry, which President Kim and the International Monetary Fund (IMF) want. The Herald said that the so-called “Big Five” were also pushing for changes to a law which could require them to make the changes if they do not voluntarily comply with the government’s requests. In response to a slight rise in 64Mbit PC 100 memories over the summer, LG said at the beginning of August that it would ramp up, rather than decrease production.