Print

Mail

wiki links

Nanya, Micron pact could transform DRAM market

A budding partnership between Nanya Technology Co (南亞科技) and Micron Technology Inc could lead to fundamental change in the memory chip-making industry, a market researcher said yesterday.

"[Dynamic random access memory (DRAM)] technology, which used to be clearly classified into `stack' and `trench' technologies, is about to see fundamental change amid leading advocators' technology development and cross partnership," DRAMeXchange Technology Inc said in a report on its Web site.

The Taipei-based researcher's remarks came after Nanya, the nation's second-largest memory chipmaker and a user of trench technology, and Micron, the US' largest memory chipmaker and stack technology advocate, announced on Monday that they had signed a memorandum of understanding on forging a technological partnership.

The companies plan to establish a joint venture to develop new technology, with a focus on DRAM chips with transistors smaller than 50 nanometers.

Nanya has an existing partnership with Munich-based Qimonda AG, which produces memory chips utilizing trench technology.

In light of the new deal, the trench camp is expected to see its market share drop to 14 percent, down from 18.5 percent last year and a peak of 23 percent in 2006, DRAMeXchange said.

The stack camp, meanwhile, will see its market share increase to 86 percent, up from 81.5 percent last year.

In addition to Micron, Samsung Electronics Co, Hynix Semiconductor Inc, Powerchip Semiconductor Corp (力晶半導體), ProMOS Technologies Inc (茂德) and Elpida Memory Inc are firm supporters of stack technology.

Analysts said the likely partnership between Nanya and Micron indicated that major players in the DRAM sector were looking for ways to reduce losses by adopting a more cost-effective manufacturing process. But they were uncertain whether the pact would inspire further consolidation in the sector.

"It is too early to conclude that the DRAM industry will see financial consolidation in this cash-burning downturn [starting from mid-September]," Citigroup Global Markets said in a client note.

But as Nanya and Qimonda had spent too much, too quickly in comparison with their stack peers, the possibility of industry migration to stack technology "would drive a slowdown for industry capacity and bit growth for the next several quarters, making the case for virtual consolidation at least," Citigroup analysts Jay Choi and George Chang (張家麒) wrote in the note.

However, Citigroup warned that Nanya might have to agree to unfavorable terms to seal the deal with Micron. In the near to medium-term, Nanya may also encounter operating uncertainties in converting its production lines to stack technology, the brokerage said.
This story has been viewed 1392 times.