Elpida, Taiwanese chipmakers to integrate-Nikkei

NEW YORK Tue Feb 10, 2009 1:02pm EST

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NEW YORK Feb 10 (Reuters) - Japanese chipmaker Elpida Memory Inc 6665.T has agreed to integrate its operations with three Taiwan chipmakers in an attempt to survive severe slumps in demand and prices, the Nikkei business daily reported.

Elpida, the world's No. 3 DRAM maker, will tie up with Powerchip Semiconductor Corp 5346.TWO, ProMOS Technologies Inc 5387.TWO and Rexchip Electronics Corp, the Nikkei said.

The integrated entity would be the world's second-largest DRAM maker after South Korea's Samsung Electronics Co (005930.KS). It also would be the first integration of a Japanese chipmaker with foreign firms, the Nikkei said.

The deal would likely allow Elpida to tap the financial assistance Taiwan is considering for its ailing semiconductor industry, the report said, without citing sources.

Elpida may also apply for help from an industry rescue plan being considered by the Japanese government, it said.

Elpida President Yukio Sakamoto is expected to sign a basic agreement with the Taiwan chipmakers and the Taiwan government on Wednesday, the Nikkei said on its website.

Elpida and Powerchip already have a tie-up agreement, which operates under the Rexchip name.

While details have yet to be worked out, the integration will likely be achieved by setting up a holding company that would control Elpida and Rexchip, the Nikkei said.

Powerchip and ProMOS, Taiwan's No. 3 DRAM maker, would probably come under the umbrella of Rexchip, it said.

The companies aim to finalize details and make an official announcement by the end of this month, with the goal of integrating operations by March 31, 2010, the Nikkei said. (Reporting by Ted Kerr; Editing by Brian Moss)

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