Micron to talk to Taiwan govt on ProMOS tieup -paper

TAIPEI, Dec 16 (Reuters) - U.S. Micron Technology MU.N President Mark Durcan will hold talks with Taiwan officials about a possible tie-up with struggling DRAM maker ProMOS, a newspaper reported on Tuesday.

Facing a severe cash crunch, ProMOS Technologies, Taiwan’s No. 3 DRAM maker, has asked for assistance from Taiwan’s government, which is encouraging consolidation in the sector.

The Commercial Times, citing unnamed sources, reported that Micron would present some plans, including setting up a DRAM research and development center and moving its production of NAND flash memory chips to the island.

In exchange, the paper said, Micron would expect the government to back talks with ProMOS to join Micron’s camp.

ProMOS' application for government assistance comes amid signs ProMOS and Powerchip 5346.TWO, Taiwan's top DRAM maker, could be strengthening their ties with Japan's Elpida Memory 6665.T, the world's No. 3 DRAM maker.

Taiwan’s government plans to allocate up to $800 million to help domestic DRAM makers, but under the condition that they have join either the Micron camp or the Elpida camp, the Chinese-language newspaper said.

Micron or Elpida could boost its market share once ProMOS joins either of them, the paper said, adding that Micron could meet ProMOS executives next week.

Government officials declined to comment on the report and ProMOS’ spokesman was not available for comment.

But the Ministry of Economic Affairs said it would hold a briefing at 1000 GMT to announce its plans for local DRAM makers.

As of 0322 GMT, ProMOS shares 5387.TWO had jumped 6.9 percent to their daily limit, compared with the main TAIEX's .TWII 1.3 percent decline. Powerchip shares fell 0.6 percent and Nanya Tech shares lost 0.2 percent.

Nanya Technology 2408.TW, Taiwan's No.2 DRAM maker, has been a partner of Micron in Taiwan, and the two companies have recently strengthened their alliance by becoming joint venture partners in another DRAM maker, Inotera 3474.TW.

Talk about consolidation has swirled through the global DRAM industry in recent months, as the sector streamlines to help adapt to a large oversupply of dynamic random access memory (DRAM) chips, which are used mostly in computers. (US$1=T$33.2) (Reporting by Baker Li, Editing by Ken Wills)