[EDITORIALS]Time to Decide on HynixThe government cannot delay any longer a definite decision regarding Hynix Semiconductor Inc. While the chipmaker is likely to face another liquidity crisis, domestic and foreign criticism about government support to the chipmaker has reached a critical level.
Hynix Semiconductor has received a total of 4.5 trillion won ($3.5 billion) of bailouts since last December. "After this bailout, we will not need any more funds to normalize our operations," Hynix insisted whenever it received money since then. "Let's weather this emergent crisis first," creditor financial institutions said, whenever they provided a bailout to the chipmaker. But it is said that Hynix needs 5 trillion won of debt rescheduling in addition to the bailouts. The U.S. Commerce Department has recently made an issue of the Korean government's support to Hynix Semiconductor, based on World Trade Organization rules which forbid subsidies to individual companies. Washington may call the government to account for its "improper" subsidies, but that might reflect the opinions of American chipmakers who hope Hynix will collapse.
If Hynix Semiconductor fails, the impact on the Korean economy will not be trivial. If that happens, the government will be harshly criticized for letting a major firm collapse. Hynix issued 1.6 trillion won of global depository receipts to foreign investors only two months ago because of the rosy outlook for the chipmaker. If Hynix is not normalized, the nation's credit rating as well as Hynix' reputation will suffer internationally.
Should the government continue to burden the public with more funds for Hynix Semiconductor, just like throwing water on thirsty soil, on the doubtful expectation that "the chipmaker will revive if we help it?"
The government faces a dilemma. Should it decide to withdraw from Hynix and leave the chipmaker's future in the hands of the market, or continue to support the chipmaker, accepting criticism that it is ignoring principles of equity and that Seoul is violating WTO rules against subsidies?
The government has no time to hesitate; we hope it will make a firm decision.