Toshiba offers DRAM unit to Samsung

Once the world's largest DRAM producer, Japan’s Toshiba is now desperately
trying to sell its DRAM memory chip unit. After approaching Germany's Infineon,
Toshiba has reportedly offered the unit to arch rival Samsung Electronics of
South Korea.

Samsung is already the world's largest DRAM producer. The company said it had
received the unsolicited take-over offer from Toshiba. "As far as I know,
Toshiba is contacting several ranking DRAM makers around the globe," said
Kevin Jeong, a spokesman for Samsung.

Toshiba is also talking with NEC and Elpida, the 50-50 joint venture between
NEC and Hitachi, about combining its DRAM operations with theirs.

"Desperate times call for desperate measures," noted one chip
industry observer who noted that the Toshiba move indicates sharply how bad
things have become in the DRAM business. "With each down turn a few major
players give up. Last time (1996) it was Texas Instruments. This time it is
Toshiba."

The memory chip market has absorbed the bulk of the downturn in chip sales
hurt by slowing sales of computers and telecommunications equipment. To make its
chip units more attractive, Toshiba has already announced it will cut 19,000
jobs, most of them in the embattles IC unit.

Analysts say Samsung would not be interested in Toshiba's DRAM business, but
may want to make a bid for its NAND flash memory operations, and area Samsung
has been looking to expand. In the process of negotiations, however, taking some
of Toshiba's DRAM facilities may be unavoidable.

Intel and Advanced Micro Devices are the largest flash memory chipmakers with
a combined market share of almost 40 per cent.  Samsung accounts for a mere
3.7 percent of the flash memory chip market, while Toshiba holds an 8.4 per cent
market share. Samsung licenses NAND flash memory technology from Toshiba.