"We have told our operation in Taiwan to check out the reports," a spokesman of Hynix said. "The reports have caused us a great concern."

Nanya Technology Corp., Powerchip Semiconductor Corp., Winbond Electronics Corp. and Mosel Vitelic Inc. joined forces to seek government imposition of punitive tariffs on dynamic random access memory (DRAM) chip imports from Hynix, reports from Taipei said.

Nanya said the company and other local chipmakers were set to form an alliance next week that will take action against Hynix Semiconductor Inc.

"Yes, preparations are getting underway. It seems quite a few other companies are interested in being part of this endeavour," a Nanya Technology official said.

Aa dozen other local memory chip suppliers, including Macronix International Co. Ltd., are also expected to join in the action, he said.

Analysts in Seoul said punitive tariffs would have greater impact on Hynix exports than similar actions by the United States or the European Union, noting that Taiwan is Asia's largest spot market and a key provider of motherboards and main supplier for US computer makers.

Taiwan also absorbs more than 10 percent of Hynix chip exports.

Should the US, EU and Taiwan impose punitive tariffs at the same time, Hynix would lose half of its exports.

"Punitive tariffs by Taiwan would deal a greater blow to Hynix than those by the United States or the EU," Michael Min of Tongyang Securities told AFP.

He noted Hynix had said it was planning to make up for the US and EU tariff barriers by increasing its indirect exports through Taiwan.

"There is little that Hynix could do about this but for hoping that the South Korean government may lead negotiations with those countries successfully," Min said.

Hynix shares closed up 9.8 percent at 4,420 won Thursday, extending gains for the fourth straight session, with investors expected the government to take some measures to help rescue the company.

South Korea has threatened action at the World Trade Organizationafter the United States slapped Hynix with tariffs worth 57.37 percent on charges the company had received government subsidies.

The US Department of Commerce said DRAM chips from South Korea were unfairly subsidised and countervailing duties would be imposed on chips shipped by Hynix.

Hynix faces a similar probe in Europe, where the European Commissioncalled for import duties of 30-35 percent on Hynix's shipments to the EU and a preliminary ruling is due late this month.

South Korea's Ministry of Commerce, Industry and Energy insisted the government had taken no part in the bailout programme for Hynix which was decided upon by Hynix creditor banks.

Last year, DRAM chips made up 35 percent, or 5.97 billion dollars, of South Korea's total semiconductor exports, of which 32 percent or 1.94 billion dollars were shipped to the US.

Hynix has racked up net losses of 9.5 trillion won (7.5 billion dollars) over the past three years, including 1.95 trillion won of loss last year.

SPACE.WIRE