Elpida Memory Inc. is in negotiations to acquire the dynamic random access memory operations of Taiwanese semiconductor maker Powerchip Technology Corp. to better compete with South Korean rivals in the global market, sources said Monday.
The chip maker is also considering taking over Powerchip's cutting-edge production facilities in an apparent switch from its earlier plan to merge or strike a capital tieup with the firm and other Taiwanese chip makers, the sources said.
Elpida needs to bolster its DRAM business because prices have fallen sharply since last summer due to slow sales of personal computers.
In light of its financial needs, the company will likely take over Powerchip's DRAM business by taking on the Taiwanese firm's debt instead of making a cash investment, the sources say.
In the July-September quarter last year, Elpida ranked third in the world's DRAM business with a market share of 16.2 percent in terms of sales value, and Powerchip's share stood at 2.7 percent, according to iSuppli Corp., a U.S. market research agency.
Their combined share of about 19 percent falls far short of industry leader Samsung Electronics Co.'s 40.7 percent, but they could close in on the second-largest producer, Hynix Semiconductor Inc., another South Korean firm with a 21 percent share.