Talks on consolidation among Taiwan DRAM makers heat up
* Elpida in talks with Taiwan makers on merger, other options
* Shares of Elpida, Powerchip and ProMOS surge
* Analysts say unlikely to see one single DRAM company soon
By Baker Li and Sachi Izumi
TAIPEI/TOKYO, Jan 21 (Reuters) - Talks to consolidate Taiwan's struggling DRAM memory chip industry gained pace on Wednesday, with major domestic and foreign players meeting government officials in a bid to reach deals as the Lunar New Year approaches.
Taiwan's top three DRAM makers, Powerchip (5346.TWO), Nanya Technology (2408.TW) and ProMOS (5387.TWO) have all been meeting with government officials to discuss possible mergers or other measures aimed at reducing a chronic supply glut in the market for DRAM chips, which mostly power personal computers.
Executives from Japan's Elpida (6665.T) and U.S. firm Micron (MU.N), technology partners for Powerchip and Nanya respectively, were also planning trips or had come recently for talks as the industry grapples with its worst ever downturn.
Makers of dynamic random access memory (DRAM) chips are battling a long supply glut and now a slump in demand amid a spreading global recession that is causing them to lose money on each chip they make.
Shares of Powerchip, ProMOS and Elpida all jumped by more than 6 percent on Wednesday after a string of media reports and company statements that indicated efforts were heating up to restructure the industry before the week-long Lunar holidays start next week.
(For a story on possible outcomes of the restructuring of the DRAM industry, click on [ID:nTP355934])
Japan's Elpida Memory said it was in talks with Taiwanese DRAM makers including Powerchip, ProMOS Technologies and Rexchip, its chip joint venture with Powerchip, on a possible merger as well as some other options. [nT331174]
"We are discussing several possibilities, but nothing has been decided," Elpida spokesman Hideki Saito said.
Elpida and Powerchip have previously said they are considering a number of tie-ups, including a merger.
Meanwhile, Taiwan's Chinese-language Economic Daily, citing an executive at No. 2 DRAM maker Nanya Technology (2408.TW), said the Taiwan government would like to merge all of the island's struggling DRAM makers into a single company. Continued...