Elpida to “Consider Merging with ProMOS”, Says Chief Executive Officer

Elpida Confirms Intention to Merge with ProMOS

by Anton Shilov
11/25/2008 | 12:45 PM

The head of Elpida Memory, one of the world’s largest suppliers of dynamic random access memory (DRAM) chips, has confirmed that the company was interested to merge with ProMOS and, perhaps, even PowerChip Semiconductor Corp.

 

“We will consider merging with ProMOS Technologies,” Yukio Sakamoto, chief executive officer of Elpida said during his visit to Taipei, Taiwan, reports Taiwan Economic News. Besides, the Japan-based memory maker is also said to be “assessing the feasibility of merging with PowerChip Semiconductor (PSC).

Rumours about possible merge between Elpida, ProMOS and PowerChip emerged last week when it became clear that Mr. Sakamoto plans to visit Taiwanese authorities.

PowerChip Semiconductor is already collaborating with Elpida on capacity-for-technology terms and is generally likely to merge with the Japanese memory supplier in order to create a very competitive entity.

Meanwhile, ProMOS collaborates with Hynix Semiconductor for technologies and Elpida demands the alliance to be suspended. On the other hand, United Microelectronics Corp. (UMC), which owns second largest – 8.69% – stake in ProMOS, collaborates with Elpida.

Earlier this year Elpida decided to postpone the launch of a memory production joint venture in China. As a result, it is pretty surprising that the company wants to merge with Taiwanese memory makers amid global economic slump as well as particularly tough situation on the market of DRAM. On the other hand, it is pretty logical to invest when competitors cannot and it is also important to gain already operating manufacturing capacities ahead of the rivals, such as Samsung Electronics or Hynix Semiconductor. It would be even worse if Taiwan-based makers of memory go bankrupt.

Mr. Sakamoto reportedly pointed out that the global DRAM market would be rocked if Taiwanese DRAM chipmakers were to be phased out.