Elpida Memory May Merge With ProMOS Technologies

Taipei, Nov. 25, 2008 (CENS)-Elpida Memory Inc. Chairman Yukio Sakamoto said during his recent stay in Taiwan that his company "will consider merging with ProMOS Technologies" and is assessing the feasibility of merging with PowerChip Semiconductor Corp. (PSC).

The top Elpida executive recently flew to Taiwan to meet with his counterpart at PSC to show determination to work with the Taiwanese strategic partner regardless of the bearish DRAM market.

Some industry watchers believe in addition to solidifying partnership with PSC, seeking to merge with ProMOS is another purpose behind Sakamoto's visit to Taiwan. He said his company would only merge with ProMOS if the Taiwanese chipmaker settles its debt and cuts its technological tie with Hynix Semiconductor of South Korea.

Industry watchers expect Elpida to likely take over ProMOS in partnership with United Microelectronics Corp. (UMC) considering that UMC currently has the second-largest stake in ProMOS, as well as having close technological tie with Elpida. They said the Elpida and ProMOS merger would offer a good opportunity for UMC to unload its stake in the money losing chipmaker, in which it now has 8.69% shareholding.

Sakamoto said his company had discussed in detail with Frank Huang, PSC's chairman, who said "anything is possible," with both companies stressing any cooperation should be built on mutually healthy finances.

Sakamoto pointed out that the PSC-Elpida alliance is already the world's most competitive DRAM consortium, and the global DRAM market would be rocked if Taiwanese DRAM chipmakers were to be phased out. Recent reports are that some Taiwanese DRAM chipmakers are in dire financial straits.