Elpida Memory, a large supplier of dynamic random access memory (DRAM), on Friday said that its board of directors has decided to acquire a portion of the shares its strategic partner Powerchip Semiconductor Corporation (PSC) owns in Rexchip Electronics Corp. (Rexchip), a Taiwan-based manufacturing joint venture created by PSC and Elpida.
Elpida indicated that the prolonged slump in DRAM market prices is currently helping to clarify which DRAM makers will remain as going business concerns. Given this environment, Elpida has decided to increase its stake in Rexchip above its current 48.8% holding for the purpose of adjusting capacity allocation in order to achieve better supply-demand balances in the DRAM spot market and in the market for DRAMs supplied to major PC makers. While Elpida has the utmost respect for PSC as a partner in the Rexchip joint venture it believes Rexchip can achieve faster business decision-making capabilities by becoming an Elpida subsidiary.
Elpida plans to acquire a 52.0% stake in Rexchip by purchasing a portion of the Rexchip shares held by PSC by the end of FY 2008 (March 2009). The acquisition will result in Rexchip becoming a consolidated subsidiary of Elpida. Value of shares is to be decided.