Mosel Vitelic Inc (
"We are not having discussions," Mosel Vice President Thomas Chang (張東隆) said in an interview. Infineon still hopes to increase its market share through linkups with rivals, he said.
Memory-chip makers globally are seeking to merge to cope with slumping demand that analysts say will shrink sales by half this year to about US$15 billion. The lack of action among Taiwan chipmakers, which account for about 15 percent of the market, may place them at a disadvantage as Korea's Hynix Semiconductor Inc attempts to tie up with US-based Micron Technology Inc, some investors said.
"We're quite bearish on the Taiwan memory-chip makers," said Magdalene Miller, who counts Mosel shares among the US$2 billion she helps manage for Standard Life Investments. "They bear a big technology risk."
The industry, now dominated by Samsung Electronics Co., Hynix, Micron and Infineon, which between them hold about 80 percent of the market, will probably be reduced to three suppliers within about two years, Miller said. Toshiba Corp. is negotiating with Infineon to merge its memory-chip business.
The Taiwan companies depend on overseas partners for their manufacturing technology, she said. Many of those partners, such as Japan's NEC Corp., are exiting the memory-chip business.
Japanese makers, which once commanded more than 90 percent of the market, today account for less than 10 percent.
"Consolidation will be quite positive for Samsung, which will be better able to control prices," said Miller, who has a stake in the Korean company, which holds the largest share of the market at about 30 percent.
Mosel negotiated contracts with its PC customers to raise memory-chip prices by 50 percent in October, Chang said. Since that time, spot market prices have more than tripled, he said.
Samsung and Hynix also reported this week they've negotiated higher contract prices with their customers.
DRAMeXchange.com Corp, a clearinghouse for dynamic random-access memory, or DRAM, chips said the spot-market price of a 128-megabit benchmark chip rose from a record low of US$0.99 on Oct. 26 to US$1.78 on Thursday.
Mosel said its fourth-quarter expectations have not changed because only December sales are affected by the price increase.
"The outlook for next year is much better," Chang said without predicting when the company may return to a profit.
Mosel plans to cut DRAM production to about 62 percent of total sales by the end of next year from about 75 percent in November. The company hopes to increase production of so-called flash-memory chips, which store data and programs until they are erased. DRAM chips lose their memory after power is turned off.
Mosel shares rose as much as NT$0.70 to NT$11.15. They've declined about 31 percent this year.
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