HONG KONG: Micron Technology Inc, a leading memory chip maker in the world, has expressed interest in restructuring Taiwan's DRAM companies. The company says talks with the island's government already are underway.

The US-based company said late Monday it would share up to 2,000 of its 17,000 patents, potentially creating a joint-development business model with its smaller Taiwan counterparts. Micron also will carry out research and development on the island.

Micron would take a stake in a holding company formed by some of the island's struggling chip makers, according to the company's spokesman, who didn't give details on which companies were involved.

Market watchers think all three top memory chip makers in Taiwan could be on the list: ProMOS, Powerchip and Nanya Technology. The three companies have been working on operations and product restructuring since December last year.

Taiwan's government has agreed to spend up to NT$70 billion ($2 billion) to bail out its technology sector, which contributes over 50 percent of the island's GDP (gross domestic product). The industry has been hurt by falling prices and weakening market demand.

"Micron is interested in this effort because it creates a better environment for the DRAM (dynamic random access memory) industry and provides Micron with a cost-efficient way to grow its scale," Dan Francisco, a spokesperson at Micron was quoted by Reuters as saying.

Micron Technology's Asian competitor, Japan's Elpida Memory Inc, has been reported actively seeking strategic partners in Taiwan to launch more cost-efficient products.

Michael Sadler, executive vice president of Inotera Inc, a joint venture of Micron and Nanya, was quoted by a Taiwan newspaper as saying that Micron would offer "the most preferential conditions" to form a holding company.

Francisco would not say whether Micron's proposal involved any funding on his company's part, noting the matter is still under negotiation.

He did not say when the proposal was submitted, but noted negotiations have been under way for weeks.

People familiar with the matter said the Taiwan government is most likely to establish a new holding company of memory chip makers first.

Foreign companies could bring new technologies in exchange for stakes in the new entity. The government hopes the new company will be geared-up to compete against South Korean DRAM leaders such as Samsung and Hynix.

Taiwan's manufacturers produce nearly a quarter of the DRAM chips used in PCs and other electronic gadgets.

(HK Edition 03/04/2009 page16)