San Francisco  - Shares of US memory chip maker SanDisk Corp soared more than 25 per cent early Friday after reports that it might be bought by Korean electronics giant Samsung.

SanDisk's shares have dropped more than 45 per cent since the beginning of the year as the industry reeled from a market glut that has pulled down average selling prices.

Samsung said Friday that it was looking at ways to tie up SanDisk either through an acquisition or an alliance. "We are exploring all options, including a buyout and an alliance, but nothing has been decided at this time," a Samsung statement said.

The company already pays SanDisk up to 500 million dollars annually in royalties relating to flash memory patents, according to US investment bank Lehman Brothers.

"As SanDisk's market cap is just around 3 billion dollars, we believe this reason itself could serve as an acquisition merit for Samsung," Lehman Brothers Vice President of Asia Technology, CW Chung, said in a research note Friday.

SanDisk issued the following statement: "SanDisk periodically has conversations with multiple parties, including Samsung, regarding a variety of potential business opportunities. We evaluate all of these opportunities, but maintain a policy of not commenting on market rumours or speculation." (dpa)