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Taiwan wants tie-up with bankrupt Elpida

Posted: 02 Mar 2012 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM? global DRAM market? memory chip?

Two days after Elpida Memory Inc. filed for bankruptcy, the government of Taiwan is pushing through its plan to consolidate its memory chip makers with the Japanese DRAM maker, according to reports by the Associated Press.

Elpida said its business was severely affected by the plummeting DRAM prices, leaving the company in heavy debt.

For months, Elpida and Micron Technology Inc. were discussing consolidation with six Taiwan-based DRAM makers to fight against competition from Samsung Electronics Co. Ltd, said the AP report. Taiwan's Economics Ministry has said in a statement that Micron will continue to play a key part in the consolidation, which may include Elpida if it will be able to restructure after its bankruptcy.

The report also noted that Taiwan company Nanya Electronics has been working with Micron for years. But Nanya declined to comment on some reports saying that it persuaded the Taiwan government to offer Micron more incentives to make a deal possible, the report noted.

Another Taiwan-based chip maker, RexChip Electronics Corp., in which Elpida is a major stakeholder, said it will sell its chips either to a restructured Elpida or it will find new buyers. The company is seeking $135 million in outstanding payments from Elpida, the report said.

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Samsung Electronics Co. Ltd has been consistently feeling the love from the mobile DRAM market as reflected by the success of its Galaxy S2 and Note products. In fact, it is the only gainer in 4Q11 that saw its share reach nearly 54 percent of the total DRAM market.
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Competition in the DRAM market is very stiff. South Korea's Samsung and Hynix Semiconductor Inc. combined share controls than 60 percent of the world memory chip market, according to TrendForce Corp.

A market report done by IHS Inc. noted that a merger between Micron and Elpida would have capacity for 374,000 DRAM wafer starts per month. This combined company would have a 28 percent share of worldwide DRAM manufacturing capacity, placing it just behind Samsung, which has capacity for 433,000 wafer starts per month, or 33 percent of global DRAM capacity.

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