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Is there no end to the munificence of Hynix debt-holders? Mostly Korean banks, the Hynix lenders have saved the DRAM maker's bacon for the third time. In two years.

The rescue package sees $4bn of debt reshuffled with approx. 40 per cent swapped for equity and longer repayment terms granted on the rest. The Korean banks may be stupid, but they are not that stupid: no new money is advanced to Hynix.

There may be a prospect of Hynix surviving, and there may be a prospect of the debtholders seeing some of their money returned. But this scenario remains highly unlikely, so long as Hynix maintains its independent, lame duck status.

First, DRAM prices would have to rise high enough for Hynix to a: repay debt and b: invest in new production facilities.

With a cleaner balance sheet, Hynix will make itself more attractive to prospective buyers. But where are they? Samsung ain't interested, Micron's been there, done that and got kicked in the teeth by the board and the unions; Infineon is looking to Taiwan for its JVs; the Taiwanese DRAM makers are not big enough to take on the mare's nest that is Hynix.

This all adds up to Hynix remaining on life support maintained by benevolent compatriots. And this in turn will translate into ammunition for Micron to train at Hynix in its anti-competition case filed with the US international trade regulator, the ITC. ®

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