Thu, Apr 02, 2009 - Page 1 News List

TMC chooses Elpida Memory for partnership

POSSIBILITIESTaiwan Memory Co is still in talks with US chipmaker Micron Technologies Inc, which needs to clear the idea with Nanya Technology Corp

By Lisa Wang  /  STAFF REPORTER, IN HSINCHU

The government-led Taiwan Memory Co (TMC, 台灣記憶體公司) said yesterday it has chosen Japan’s Elpida Memory Inc as its strategic partner to jointly develop and make new memory chips for mobile devices based on the Tokyo-based company’s technologies.

Through the tie-up, TMC aims to jointly develop its own intellectual properties, to develop technological capabilities for designing chips and to sell its own-brand products or chips under the Elpida brand, TMC head John Hsuan (宣明智) told a press briefing yesterday.

TMC will provide capacity for future partners and possible capital injection, Hsuan said.

TMC would not rule out buying a stake in its partners, he said.

“Elpida has shown strong intent to have detailed discussions with TMC about technological cooperation,” Hsuan said. “The companies will enjoy a deep cooperation.”

To diversify from the existing computer memory chip market, TMC would focus on developing innovative dynamic random access memory (DRAM) chips, especially mobile DRAM, as well as outsourcing production to local DRAM companies using licensed technologies from TMC, Hsuan said.

Elpida said yesterday that it was pleased to be selected as TMC’s technology partner.

“It seems that TMC gave high ratings to Elpida’s advanced technology and our business achievements in Taiwan. Our intention now is to do our best to create win-win business scenarios for Elpida, TMC and Taiwanese DRAM companies,” said Yukio Sakamoto, chief executive of Elpida, in a press release.

The Japan-Taiwan memory partnership would help to revitalize the DRAM industry, Sakamoto said. Elpida currently owns a memory joint venture, Rexchip Electronics Inc (瑞晶電子), with the nation’s top DRAM maker, Powerchip Semiconductor Corp (力晶半導體).

“The tie-up will be a boon for Rexchip, as it will have a stable market for the chips it makes,” said Kenneth Lee (李克揚), a vice president of Fubon Securities Investment Services Co’s (富邦投顧) research team.

Powerchip may indirectly benefit from the collaboration, he said.

Elpida could be just one of TMC’s potential technological partners, as the Taiwanese firm is also in talks with US chipmaker Micron Technologies Inc.

“TMC will develop better technologies and product portfolios by collaborating with two technological partners, not just one,” Hsuan said. “Elpida and Micron did not object to the proposed business model. Basically, we will have two separate teams to handle business with the two companies.”

Micron has not made a final decision as it needed to first win the approval of its Taiwanese partner, Nanya Technology Corp (南亞科技), before joining the TMC-Elpida camp, Hsuan said.

Nanya would not object to the proposal, but it needed to hold more discussions with Micron before making a final decision, Nanya spokesman Pai Pei-lin (白培霖) said.

TMC was still hoping for a capital injection of as much as NT$30 billion (US$887 million) from the government, which would give the government about a 50 percent share of the company, Hsuan said.

TMC will seek more private investors after finalizing a business plan by the middle of this month, Hsuan said, adding that several investment institutions had shown interest in the chipmaker.

TMC plans to recruit 800 people after it is established next month.

Shares of the nation’s major DRAM companies Powerchip, Nanya and ProMOS Technologies Inc (茂德科技) rallied 6.8 percent, 6.97 percent and 6.82 percent, to NT$4.71, NT$8.29 and NT$1.41 respectively yesterday.

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