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The continued manoeuvrings of increasingly desperate DRAM manufacturers in Taiwan would seem to be coming to a head, if news reports are to be trusted. The saga has played out for over a month and now (hopefully) will come to a close by the end of February.

It looks like the industry will be split down the middle with Elpida merging in one form or another with PSC and its Rexchip JV, and pushing the Taiwan Government to let it acquire ProMOS to help bulk up its combined market share and manufacturing capacity. Elpida would act as the IP provider in such a move, something at the core of the Taiwan Government's efforts to see a long-term future for a DRAM industry on the island.

In the other corner is Micron, which will merge with Nanya and Inotera. Micron is said to be pitching for ProMOS for the same reasons stated above. Micron of course would act as the IP provider to these Taiwan companies.

Although I never thought we could ever see a merger of all the Taiwan DRAM producers into a single entity (don’t forget executive egos), ‘DRAM Taiwan Corp.’ had a certain ring to it! However, in the short-term it didn’t have the IP and that would have led to a certain death.

The problem is that splitting the players into two camps with the required IP protection doesn’t bulk up either team enough to directly threaten Samsung.

Without that I don’t see much point to the exercise as some way down the road more consolidation will be required to bulk up against Samsung. IMHO, either Micron or Elpida should get all the Taiwan DRAM companies, that way creating a low-cost, IP protected powerhouse that would keep Samsung in check.

Unfortunately it doesn’t look likely and a great opportunity would have been missed.