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In a bid to return to profitability, Nanya Technology Corp. plans to withdraw from manufacturing of commodity dynamic random access memory (DRAM) within the next twelve months. Instead, Nanya will manufacture special-purpose memory, such as LPDDR and LPDDR2, used inside various consumer electronics products.

Nanya commanded 4.5% of the global DRAM market in Q1 2012, according to IHS iSuppli. The company can produce 55 thousand of 300mm wafers a month and has a strong research and development division. For example, Nanya had already started migration to 30nm process technology and begun developing 20nm process technology. Despite of its partnership with Micron Technology (the two companies co-own Inotera Memories), Nanya had after-tax net loss of NT$17 billion ($569 million), or NT$1.15 per diluted share, in the first half of 2012, reports Taiwan Economic News.

Charles Kao, the president of Nanya, said last week that the company had been unsuccessful in competing with Samsung Electronics and Hynix Semiconductor in the commodity DRAM market. As a result, the company decided to refocus its business on to mobile and niche memory chips for consumer electronics. To further cut its expenses, Nanya will transfer R&D personnel to Inotera and negotiate with Micron Technology to revise cooperation.

It remains to be seen whether Nanya completely drops production of general-purpose DRAM and will only manufacturer LPDDR2 and similar memory types used on niche markets, or will continue with certain leading-edge products. The company had plans to make DDR4 memory starting from 2013 and although DDR4 formally belongs to "commodity" types, it will not carry commodity price-tags for a couple of years, especially when specialty products like LRDIMMs are taken into account.

Tags: Nanya, Inotera, Micron, DDR4, DRAM, Business

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