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Steve Appleton, Micron Technology, Chairman and CEO has previously made it clear that given the worsening crisis in the semiconductor memory market, he would be happy to play a key role in the desperately required sector consolidation, specifically in the DRAM industry. According to Reuters, Micron’s President, Mark Durcan will hold talks with Taiwan officials regarding ProMOS Technologies, Taiwan's third largest DRAM maker.

Micron has already played a small part in the current DRAM crisis with the purchasing of Qimonda’s 50% share in Inotera Memories and formed a partnership with Nanya. However, with no major consolidation yet to have taken place the DRAM industry continues to suffer from growing overcapacity and weakening demand.

The Taiwan Government has recently said it would support the DRAM industry in Taiwan through this crisis, but would expect a level of consolidation to be sought to reduce overcapacity and return the industry to profitability. Support was muted to be in the form of supporting banks giving further lines of credit to enable operations to continue as major Taiwanese DRAM producers such as Powerchip Semiconductor (PSC) burn cash on a quarterly basis.

There is a real fear that Taiwanese DRAM manufacturers will disappear altogether as standalone companies. PSC could well be integrated into partner Elpida and ProMOS into the Micron camp. That leaves Nanya as standalone, though in close collaboration with Micron.

There is also concern that government support in Korea for Hynix coupled to the efforts to be made in Taiwan would simply prolong the current DRAM crisis and subsequent need for clear cut consolidation.

Though a delay is likely, the inevitable clear cut consolidation must surely happen! The threat of fire sales normally kick-starts the cycle and smoke is already coming out of the exhaust stacks at many memory manufacturers.

Caption: Micron presented these slides at last weeks annual investor conference, highlighting the serious cashflow problems faced in the memory market. Though Samsung was not represented, it shows those at risk most from right to left, according to the company.