Infineon wants a DRAM foursome
Toshiba no longer invited?
Infineon is in talks with three Taiwanese DRAM producers about a possible merger that could lead to the group holding a 20 per cent share of the market.
The German chipmaker, controlled by Siemens, is talking to Mosel Vitelic, Winbond and Nanya about the possibility of a joint venture in memory chips.
Ulrich Schumacher, Infineon's CE, says the four companies would have a combined market share of 20 per cent, with his portion contributing about 11 per cent. This would create the industry's largest DRAM producer.
Infineon has been on the verge of a merger deal with Toshiba, but, as the FT reports, those discussions may be dented by Toshiba's need for an overhaul in its DRAM unit, which could cost up to $500 million. This is not something Infineon will want to get involed with, it's in a cash crunch itself. Analysts at UBS Warburg estimate it could lose around $1 billion on DRAM over the coming 15 months.
These aren't good times for any memory players. Debt-laden chip maker Hynix has just had its rescue plan approved after the company's creditors agreed to extend its credit line, postpone payment on some existing loans and convert other debt to equity.
With market research organisation Gartner predicting a 67 per cent fall in sales this year and a 19 per cent fall during 2002, the situation is going to get a lot worse for Hynix, in turn making recovery more difficult for other producers.
Japanese memory makers NEC, Hitachi, Toshiba and Matsushita have already complained about Hynix and Samsung selling DRAM in Japan at below cost price, and Micron is considering making a similar complaint in the US. ®
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