Micron Technology and its Taiwan-based partner Nanya Technology said Thursday they are no longer interested in establishing a DRAM partnership agreement with Taiwan Memory Company, which is backed by Taiwan’s government and counts the island’s DRAM chipmakers as members.
The announcement was no surprise to analysts, given what Micron executives had to say last week about a potential tie-up. “There has been a lot of speculation around the consolidation of the Taiwan assets,” Micron CEO Steven Appleton said. “As you know, the Taiwan companies are, I would say, very unstable in terms of their debt and cash structures.”
The Right Decision
Appleton noted that TMC tapped Elpida Memory to become its key technology partner only after its Japan-based rival agreed to terms that Micron found unacceptable. He also said Micron saw no upside in risking the loss of some of its memory intellectual property to its Japan-based rival.
“Having to deploy all of our technology” in exchange for equity or some other type of financial instrument “doesn’t really interest us,” Appleton said in a conference call with investors. “We just don’t see the advantages for us to do that.”
Micron intends to concentrate on the production of new products through its Inotera memory-chip partnership with Taiwan-based Nanya Technology. “Clearly we’re focused on the relationship we have with Nanya and Inotera,” Appleton said.
During the call, Oppenheimer senior analyst Gary Hsueh told Appleton he agreed with Micron’s assessment of the deal. “It really sounds like there’s no upside here to be gained in saddling up side by side with Elpida — certainly not in terms of kicking in your (intellectual property) for free, or in exchange for capacity, because you pretty much already have that” through your “agreement with Nanya and Inotera,” Hsueh said.
Nam Hyung Kim, the chief analyst at iSuppli, also agreed with Micron’s…