This is probably as good as it gets for D-ram industry consolidation in Taiwan. ProMOS, which stood on the brink of bankruptcy for much of the past year, was assured of new business on Friday when it signed an agreement to provide manufacturing services to Japan’s Elpida. Elpida will also licence the technology needed to produce future generations of D-ram chips to ProMOS.
With ProMOS sealing the deal on switching partners from South Korea’s Hynix to Elpida, Taiwan’s commodity D-ram makers are now largely all lined up behind Elpida and the US’s Micron, the world’s 3rd and 4th biggest D-ram suppliers.
That is a big change from a year ago, when there were still Hynix and Qimonda – the bankrupt German D-ram maker – camps. But with no bankruptcies and no mergers and acquisitions in Taiwan, consolidation has been nowhere near what most people thought the industry needed.
With D-ram chip prices staging a remarkable recovery in recent weeks and growing shortage concerns (hence Elpida’s desire to secure manufacturing capacity), the window of opportunity for consolidation has now firmly passed. DrameXchange estimates global D-ram revenue increased 40 per cent, quarter on quarter, in third quarter to reach $5.7bn.
Curiously missing from the picture, therefore, is Taiwan Innovation Memory Company, the government vehicle established to reform the industry. (TIMC was previously known as Taiwan Memory Company, before the government found out that name had already been trademarked by someone else).
TIMC, who has said it would acquire technology from Elpida, was meant to ensure key future D-ram technology is ‘homegrown’ in Taiwan such that Taiwanese manufacturers no longer had to pay to licence such technologies from foreign companies like Elpida and Micron. This, then, would have been a perfect opportunity for TIMC to establish its presence by being the middle man between ProMOS and Elpida in terms of technology transfer.
Too bad funding approval for TIMC and, in fact, plans for its actual operations, are still stuck deep within the bowels of the bureaucracy in the Ministry of Economic Affairs.
