Elpida Memory Inc is considering buying shares of Taiwanese chipmakers to counter competition from Samsung Electronics Co, a move that may trigger the industry’s biggest reorganization in more than a decade.
Powerchip Technology Corp (力晶科技), ProMOS Technologies Inc (茂德科技) and Winbond Electronics Corp (華邦電子) are among possible targets, Elpida president Yukio Sakamoto said in interviews this week.
The Tokyo company is looking to acquire stakes of 20 percent to 30 percent and any deals may lead to takeovers, though no negotiations are under way, he said.
“It’s almost impossible for the Taiwanese to survive by themselves,” Sakamoto said. “Without doing something, it will be tough for us to survive, too. We don’t have the scale.”
Chipmakers face mounting pressure to unite to keep up with the estimated US$10 billion Samsung invests annually to widen its lead in chip output.
“He’s casting a very wide net, but he may only catch a small fish — or maybe no fish at all,” said Yuuki Sakurai, chief executive officer of Fukoku Capital Management Inc in Tokyo. “Sakamoto-san is very outspoken’ but what he says and what the company achieves aren’t always the same.”
For Elpida, the world’s third-largest maker of computer memory chips with a market share of about 17 percent last year, options include cross-shareholdings and forming a holding company, Sakamoto said.
However, expanding in Japan isn’t an option, partly because of the stronger yen.
“Continuing to make big investments in this country would be suicide,” Sakamoto said.
The 63-year-old executive said he’s also open to tie-ups with Nanya Technology Corp (南亞科技) and subsidiary Inotera Memories Inc (華亞科技), two other makers of the dynamic random access memory chips that help computers run multiple programs simultaneously.
ProMOS would consider any proposal from Elpida, said Ben Tseng (曾邦助), a spokesman.
Winbond chief financial officer James Wen (溫堅) said his company would be open to a deal.
However, Pai Pei-lin (白培霖), a Nanya spokesman, said a tie-up would be difficult because of Nanya’s partnership with Micron Technology Inc.
Powerchip hasn’t discussed any such deals with Elpida, company spokesman Eric Tang (譚仲民) said.
Elpida is planning to list its shares on the Taiwan Stock Exchange early next year as the “next step” in the larger strategy, Sakamoto said. The listing would help it raise money in Taiwan when the time comes to do deals, he said.
It’s not the first time Sakamoto has considered mergers with Taiwanese chipmakers. Elpida said in 2008 it was in talks with Powerchip and ProMOS. Those discussions ended last year after Taiwan’s government proposed an alternative revival plan that ultimately collapsed.
Taiwan’s top four DRAM makers saw their combined market share slip to about 10 percent last year from 17 percent in 2006, according to research firm iSuppli Corp.
All of its DRAM makers have posted three years of losses, forcing them to scale back investments, while Samsung pushed ahead, said George Chang (張家麒), an analyst at Yuanta Securities Co (元大證券).
“The previous down cycle really killed the Taiwanese,” Chang said. “They literally lost all the capability for future investment. That’s why if you look at the current technology, they’re so behind.”
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to