Micron CEO visits Taiwan for integration talks with Nanya and Inotera
Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Wednesday 14 January 2009]
Steven Appleton, chairman and CEO of Micron Technology, paid a low-profile visit to Taiwan last week for merger negotiations with its strategic partners Nanya Technology and Inotera Memories, according to industry sources. Executives at the three DRAM makers as well as Nanya's parent company Nan Ya Plastics met to settle plans for integration links in the race to win government bailout funds, indicated the sources.
Nanya declined to reveal details of the talks with the Micron executive. The Taiwan DRAM maker said in an earlier report that its rescue proposal will be submitted once a consensus on technology sharing is reached with Micron.
In related news, Taiwan's Ministry of Economic Affairs (MOEA) has stressed that the government-led bailout does not only mean a sizable cash injection. The government also intends to lobby banks to allow local DRAM makers to extend repayments on large loans, said the ministry.
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Micron hopes to unite non-Korean DRAM players in an alliance
Josephine Lien, Taipei; Joseph Tsai, DIGITIMES [Thursday 15 January 2009]
Micron is hoping to form an alliance to unite DRAM players from the US, Japan and Taiwan arranged as three parent companies and five sibling companies, according to sources at DRAM makers.
The three parent companies would be Micron, Elpida Memory and Nanya Technology, while the five sibling companies would be Inotera Memories, Powerchip Semiconductor Corporation (PSC), Rexchip Electronics, ProMOS Technologies and Winbond Electronics.
Since Nanya has been cooperating with Micron on developing processes smaller than 50nm since the beginning of 2008, Micron has promoted Nanya as a parent company in its plans, while Inotera was selected to be the leader of the five sibling companies.
The three parent companies' major task would be to provide technologies and funding, while the five sibling companies would focus on DRAM production. The plans would separate global DRAM players into either Korea-based and non-Korea-based groups.
However, both Japan and Taiwan's DRAM makers believe execution of the plan will be very difficult, while Elpida and Micron will have to reach an agreement before any further moves can be carried out.
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Tech transfer emerging as the key to Taiwan DRAM makers winning government cash
Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Thursday 15 January 2009]
The Taiwan government's requests that Powerchip Semiconductor Corporation (PSC) and ProMOS Technologies resubmit their applications for bailout funding with clearer assurances that the DRAM makers will gain access to the process technologies and IP of their overseas partners as part of the package, make it clear that the government is driving the local DRAM industry to become more technologically independent.
An official at Taiwan's Ministry of Economic Affairs (MOEA) bureau has said that any government-led intervention to rescue the island's ailing DRAM industry would be meaningless if the move did not help advance future sustainability efforts.
Fundamentally, the government-led rescue plan aims at two goals – integration links and home-grown technological development. This latter condition is proving to be challenging for the applicants, however, it is clear they will need to reach an agreement with their overseas partners if they hope to gain the government's approval, and cash. With an estimated draft budget of NT$200 billion (US$6.50 billion), all parties, at least, have an incentive to continue with talks.
For Elpida and Micron, integration links with Taiwan's DRAM makers would not only enhance their capacity expansion plans, but also put them in a more advantageous position against Samsung Electronics. More fundamentally, gaining financial assistance from Taiwan's government would help them preserve more capital amid the broad-based market erosion.
However, working out which of Elpida or Micron's DRAM technologies could be transferred to their partners in Taiwan is not a simple matter, since some DRAM IPs also crossover into the NAND flash segment.
Elpida CEO Yukio Sakamoto recently said in a Bloomberg interview that four companies – Elpida, PSC, Rexchip and ProMOS – should ideally come together as one. If the 4-in-1 merger is carried out, the combined market share of the new entity would reach almost 24%.
Meanwhile, Micron is reportedly looking to forge a 5-in-1 alliance uniting DRAM players from the US, Japan and Taiwan. If those merger talks succeed, the alliance's combined market share would top 40%, surpassing that of even Samsung which currently owns a share of around 30%.
Taiwan's major DRAM makers recorded bank loans of NT$394.4 billion for the first three quarters of 2008. Among the money-losing companies, ProMOS currently faces the most urgent pressure as its repayment deadline (14 February 2008) is drawing near.
ProMOS has expressed interest in teaming up with Elpida to attract the government's attention, since the Taiwan DRAM maker has no capital to invest in its extended collaboration with Hynix Semiconductor.
Meanwhile, a PSC executive has stressed that an immediate cash bailout should be given priority, in order to avoid bankruptcies in the short term, while efforts intended to have more long-tern outcomes, such as integration, can be carried out within a separate time-frame.
Finally, Nanya has so far been low-key in its race to apply for bailout cash primarily because it is receiving support from its parent company, Nan Ya Plastics. Nan Ya has recently offered financial support to Nanya's overseas partner Micron, which should help broker a deal under which Micron helps Nanya and their joint venture Inotera Memories in their bailout applications.
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