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Powerchip Semiconductor (PSC) has thrown in the towel on producing its own DRAM product for sale, finally providing a snippet more of DRAM manufacturing consolidation that failed to emerge in mid-2009 when Taiwan’s government intervened to reduce overcapacity and failed. Long-standing manufacturing partner Elpida Memory will purchase all DRAM products that PSC will manufacture.

PSC had dabbled in offering foundry services in the past and with all its DRAM capacity/production going to Elpida, PSC has effectively become a foundry.

PSC has 80,000 wafers per month capacity for commodity DRAM production and licenses from Elpida the right to distribute the other half of the products as their own branded products. PSC also has a right to purchase approximately 30,000 DRAM wafers fabricated at Rexchip Electronics Corporation, a joint venture between the two companies, and sell those DRAMs to their customers as their own branded products.

However, it is yet clear how much capacity will be needed by Elpida, considering the overcapacity scenario and falling process. PSC would also need to plan capacity allocation for other potential foundry partners over the coming year.

PSC recently said that it had installed its first 193ArF immersion in the third quarter last year and had begun conversion to the 40nm process.

PSC’s Fab 3 had also successfully begun the test run of 40nm process of 2Gb DRAM, with shipments starting in the first quarter of 2011.