Powerchip Technology Corp (力晶科技) and its investment subsidiary yesterday said they would sell all of their shares in Rexchip Electronics Corp (瑞晶電子) to Micron Technology Inc of the US, as consolidation continues to sweep the global DRAM industry.
Hsinchu-based memorychip maker Powerchip and Taipei-based Li Hsin Investment Corp (力信投資) said in separate stock exchange filings that they would sell a total of 691.13 million shares in Rexchip to Micron for NT$9.696 billion (US$324.2 million) at NT$14.03 per share.
Rexchip is a PC memory chip manufacturing venture between Powerchip and Japan’s Elpida Memory Inc, the third-largest DRAM chipmaker in the world.
The deal would be conditional on Micron’s purchase of the remaining shares of Rexchip from Elpida, a public relations officer at Powerchip said by telephone yesterday.
The share sale, announced before the opening of the local stock market yesterday, lifted Powerchip’s stock yesterday. Shares of the memorychip maker jumped 5.45 percent to NT$0.58 per share on the over-the-counter market, outperforming the GRETAI Securities Market index’s 0.95 percent rise.
Shares of Rexchip also surged 12.36 percent to NT$10 on the Emerging Stock Market, a preparatory board for Taiwan’s two main bourses.
Micron confirmed in a statement later yesterday that it had agreed to acquire the Powerchip Group’s 24 percent stake in Rexchip.
The US company also said in the statement it had reached an agreement with Elpida’s trustees to acquire Elpida for about ￥200 billion (US$2.5 billion). Under the agreement, Micron said it would acquire 100 percent of the equity of Elpida for ￥60 billion and ￥140 billion in future annual installment payments through 2019 would be paid from cash flow generated from Micron's payment for foundry services provided by Elpida, as a Micron subsidiary.
"We are creating the industry-leading pure-play memory company," Micron chief executive officer Mark Durcan said in the statement.
Yukio Sakamoto, Elpida president and chief executive officer as well as the company's co-trustee, said joining with Micron would result in a combined organization that can best serve customers with broader memory solutions, strength and scale.
The Micron-Elpida deal is expected to close in the first half of next year, while Micron's purchase of Powerchip Group's Rexchip shares will occur upon the completion of the Elpida deal, according to the statement.
Micron’s acquisition of Elpida would boost the US company’s market share to nearly 24 percent, allowing it to overtake Hynix Semiconductor Inc, with a market share of 23.9 percent, and make it the world’s second-largest DRAM chipmaker after Samsung Electronics Co of South Korea, DRAMexchange, a research division of Taipei-based TrendForce Corp (集邦科技), said in a report on Sunday.
The report said Micron’s acquisition of Elpida was likely to produce a multinational team of memorychip makers integrating capacity. This Micron-led alliance would be able to combine the strengths of various manufacturers in Taiwan and Japan to compete with South Korean firms, it said.
“Micron will concentrate its efforts on server DRAM and NAND flash products, with the majority of production taking place at the US maker’s Singapore fab,” the report said. “Elpida will focus on mobile DRAM production, already evident in the increase of mobile DRAM capacity to 70 percent at its Hiroshima fab.”
While Rexchip may continue focusing solely on commodity DRAM production, Micron may consider Rexchip’s R2 fab, which is idle at the moment, for NAND flash production in anticipation of strong market demand, DRAMexchange said.
As for Winbond Electronics Corp (華邦電子), another Taiwanese memorychip maker, Micron might consider increasing its server DRAM output ratio to more than 50 percent as the cloud-computing market expands, while Powerchip might gain authorization to use Micron’s 20 nanometer process technology for commodity DRAM production, according to DRAMexchange.
With a total monthly capacity representing 35 percent of global DRAM capacity, “the Micron team will be on a level playing field with Samsung and Hynix, joining the [South] Korean makers as the third heavyweight in the DRAM industry,” the report said.
This story has been updated since it was first published.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
RSS