The official, who declined to be identified, said Hitachi sees smaller benefits in extending the production contract with LG Semicon Co now that Hitachi's Singapore chip plant started full-fledged operation of 64-megabit dynamic random-access memory (DRAM) chips.

The contract includes the transfer of Hitachi's chip production technology. Hitachi's possible decision to scrap the agreement means LG Semicon would not obtain Hitachi technology for the manufacture of next-generation chips to a precision of 0.18 micrometer.

Hitachi began ties with LG Semicon in 1989, providing technology to make one megabit DRAM chips.Hitachi is currently cooperating with LG Semicon on 64 megabit DRAM chips.

Industry officials said the agreement between the two companies is due to expire atthe end of March, but Hitachi executive managing director Tadashi Ishibashi denied there was such time limits.

"There is no such time limits in our agreements" Ishibashitold a group of reporters on Thursday.

He also denied talk that Hitachi will end a tieup with LGSemicon. "Nothing has been changed between us," he said.