Manufacturing News

Micron Seeks Role in Taiwan DRAM Chip Restructuring

The market for DRAM chips has been racked by an industrywide oversupply, exacerbated by plummeting demand for PCs and electronic goods that use the chips amid the global economic slowdown.

U.S. chip maker Micron Technology is in discussions with the government of Taiwan about taking a role in restructuring the island's memory chip manufacturers, the company said.

The proposal would involve Micron sharing up to 2,000 of its 17,000 patents and potentially creating a "joint-development model" that would place certain research and development activities in Taiwan, according to a Micron spokesman.

Such a deal would involve Micron taking a stake in a holding company formed by the government of Taiwan that would include some of the island's struggling dynamic random access memory (DRAM) chip makers, though Micron would not specify which companies.

Taiwan's economic minister previously told Reuters the government has up to T$70 billion ($2 billion) to bail out the sector, which has been hurt by falling prices and a supply glut, and could take major stakes in any joint ventures.

Taiwan's top three memory chip manufacturers, ProMOS, Powerchip and Nanya Technology, have been working on restructuring plans with the government since late December.

"Micron is interested in this effort because it creates a better environment for the DRAM industry and provides Micron with a cost-efficient way to grow its scale," said Micron spokesperson Dan Francisco.

Micron, based in Boise, Idaho, and Japan's Elpida, have both been widely reported to be in discussions with Taiwan about a bailout of the sector.

On Saturday, Michael Sadler, executive vice president of Inotera, a joint venture of Micron and Nanya, was quoted by a Taiwan newspaper as saying Micron would offer "the most preferential conditions" for a holding company.

Francisco would not say whether Micron's proposal involved any funding on its part, citing the ongoing nature of the negotiations.

He did not say when the proposal was submitted, but noted negotiations have been under way for weeks.

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