Bloomberg reports memory makers ProMOS, Powerchip and Elpida are under icnreasing pressure to seek mergers or exit the industry due to heavy debts, losses and falling DRAM prices.
Chipmakers struggle to match supply with demand in the $39 billion market for memory in personal computers, where plants take years to come online and can’t be shut down cheaply. The challenge is deepening as consumers shun PCs, cutting prices for dynamic random access memory, or DRAM, 26 percent in the past year. Some companies may not be able to go it alone, said Makoto Kikuchi, who runs Myojo Asset Management Japan Co.
“Consolidation is inevitable for survival in this industry,” said Kikuchi, chief executive officer at Myojo in Tokyo. “It’s in a runaway deficit.”