(Source: By Asia News Network (MCT) – Taipei – Taiwan’s dynamic random access memory (Dram) manufacturers were losers in the latest elimination battle in the global memory sector, local industry experts acknowledged yesterday.
Two back-to-back recessions in the industry have severely damaged the Dram industry of Taiwan and Japan. Elpida, a leader in Japanese Dram manufacturing, had to file bankruptcy after it became insolvent.
Taiwan’s Dram makers are doing no better. The cash-strapped ProMOS had decided not to file bankruptcy, under the leadership of Chairman Chen Min-liang. Yet creditor banks seeking to protect their assets have filed a complaint with the Hsinchu District Court asking that the company be restructured. The court on June 4 ruled in favor of the creditor banks.
Another local Dram maker, Powerchip Technology, is still solvent and capable of paying interest on loans. The firm’s P3 plant that produces standard Dram chips is also back in operation. Yet Powerchip is currently transitioning its business from Dram production to contract chip manufacturing.
Tan Chung-min, vice president of Powechip, said the firm will sell its holdings in Rexchip Electronics, a joint venture between itself and Elpida, and get rid of its P3 plant. Withdrawing totally from the standard Dram market is just a matter of time for the firm, experts said.
Micron, the US-based Dram maker which is set to become Elpida’s new owner, is expected to acquire the Rexchip holdings released by Powerchip and turn the company into a 100 per cent subsidiary. If the plan succeeds, Rexchip will become a foreign firm, said company President Chen Cheng-kun.
Taiwan’s leading Dram firms, Nanya Technology and Inotera, were able to survive the downturn with the support of their parent conglomerate, the Formosa Plastics Group. Meanwhile, Nanya Technology has partnership ties with Micron and may become part of a Taiwan-US alliance to resist the growing threats of South Korea, which has emerged as a major Dram manufacturing base.
Yet to fend off market volatility, Nanya Technology has diversified its product mix to have non-PC Dram account for 64 per cent of the total by the fourth quarter of this year, becoming the firm’s mainstream product.
Separately, Inotera is also expected to lower the proportion of standard Dram chips, with non-standard Dram expected to account for 50 per cent of the firm’s total.
?Taiwan’s Dram industry has lost during this wave of elimination battle,” Chen said. ?Dram is unable to take roots in Taiwan.”
He said, however, that Rexchip will pay back all its debts and maintain the firm’s normal operations to protect the jobs of employees. If the company is merged into Micron in the future Rexchip will show itself as worthy of Micron’s investment, at the same time making sure the jobs of employees will not be affected.
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