The global economy slump as well as the falling prices of dynamic random access memory (DRAM) may lead to two scenarios for the industry and the key players. Some DRAM vendors may merge with the others to boost their output and market shares, whereas other companies may slowdown plans for further expansion of manufacturing capacities.
Elpida Memory, one of the world’s leading suppliers of DRAM, is rumoured to be looking forward to acquire at least one of Taiwan-based memory manufacturers. If the unofficial information is correct, then Elpida may tangibly boost its own output by securing manufacturing capacities. However, given that DRAM prices have been falling for months, Elpida is more likely to announce slowdown of its expansion in Taiwan.
The rumours emerged since Yukio Sakamoto, president and chief executive officer of Elpida Memory, plans to visit Taiwan on the 21st of November to meet with officials from Taiwan's Ministry of Economic Affairs (MOEA), reports DigiTimes web-site. There are no confirmations about the subjects of the negotiations, but since Japan-based Elpida has been trying to expand its market share for years now, the likely matter of the talks is either an acquisition or plans to build another facility.
Powerchip Semiconductor (PSC) and ProMOS Technologies are both rumored to be targets Elpida is looking into. It should be taken into account that since the meeting might be an early stage of the potential deal, the actual take over is unlikely to occur soon. PSC and ProMOS reportedly said they had never talked with Elpida regarding a merge.
Last year Elpida Memory and Powerchip have jointly announced that both parties would establish a new joint venture company to operate dynamic random access memory (DRAM) fabrication facilities in Central Taiwan Science Park. Further expansion of the facility, or, otherwise, slowdown of its further development, may also be issues that Mr. Sakamoto wants to talk about with Taiwan authorities.
Earlier this month Elpida Memory announced that it would delay the start of operations of a China-based DRAM manufacturing joint venture the company previously announced on August 6. Elpida planned the manufacturing joint venture with SVG, a Chinese venture capital group based in Suzhou City. The JV was scheduled to begin operations in the first quarter of 2010. However, the company decided to postpone the production start due to market situation.
“Given an unprecedented slump in the DRAM market and the uncertain global economy, Elpida and SVG decided to delay the start of the operations for about one year or until a market recovery is forecast,” a statement by Elpida reads.