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Macronix survives PowerChip's takeover bid

Posted: 04 Jul 2007 ?? ?Print Version ?Bookmark and Share

Keywords:PowerChip takeover bid? DRAM? Taiwan memory maker?

Powerchip Semiconductor Corp. has failed in its bid to gain control of another Taiwan memory supplier, Macronix International Corp., according to reports from the Taipei Times. The DRAM maker only obtained two seats on the 15-member board of Macronix during a boardroom showdown.

Macronix management owns about 4.8 percent of the company, while Powerchip managed to acquire 5 percent stake, and through subsidiaries, is rumored to own another 4 percent.

With that, Powerchip recently made an unusual hostile bid for eight out of 15 board seats at struggling Macronix, seeking to gain control of the company.

There are myriad reasons for Powerchip's interest in Macronix. Like Samsung, Hynix, Micron and others, Powerchip has been hit hard by a downturn in the DRAM business. One of the largest DRAM makers in Taiwan, Powerchip saw its sales drop by 15.8 percent in May alone, compared to April.

Still, Powerchip is moving full speed ahead in the arena. Earlier this year, the company formed a joint DRAM venture with Japan's Elpida Memory Inc. Rexchip Electronics Corp., the joint venture fab, is located in Houli, Taiwan, and is evenly owned by Elpida and Powerchip. Output will also be evenly divided between the partners.

At the same time, Powerchip is working on developing non-DRAM products, such as NAND flash. But it continues to miss the market window in NAND and holds a relatively weak patent portfolio in the arena. In May, Powerchip moved to cut costs by spinning out its 8-inch fab unit into a foundry operation. The new and independent company is called Maxchip.

Meanwhile, because of its heavy presence in ROM, Macronix is focusing on moving from 2bit/cell ROM to 4bit/cell this year in an offering it calls XtraROM. That should help it hold on to a long-term relationship with Nintendo. Macronix also plans to continue its efforts in low-density NOR, up to about 128Mbit or 256Mbit at 1.8V. However, the majority of its resources will soon be dedicated to making a play in NAND flash.

- Mark LaPedus
EE Times

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